Industry-specific information disclosure regulation and corporate ESG performance: Evidence from China

Abstract

Finding ways to promote environmental, social, and governance (ESG) development through effective capital market regulation is crucial. China has initiated industry-specific information disclosure regulation since 2013 to enhance market efficiency and drive economic transformation. Using data of listed firms from 2009 to 2020, this study employs a difference-in-differences model to investigate the influence and underlying mechanisms of industry-specific information disclosure regulation on corporate ESG performance. The findings indicate that industry-specific information disclosure regulation can promote corporate ESG performance by enhancing the comparability of accounting information, which fosters industry competition, facilitates external oversight, and reduces internal agency costs. Heterogeneity tests reveal that the influence is more pronounced in enterprises with higher industry fundamentals relevance, state-owned enterprises, and enterprises in regions with high market development. These findings broaden the scope of information disclosure regulation studies and offer tangible regulatory strategies for transitional economies to bolster ESG development.