Author(s): Sheng Yao, Mengjiao Sun, School of Management, China University of Mining and Technology
Pages: 49-65
Year: 2016 Issue:  5
Journal: Journal of Shanghai LiXin University of Commerce
Keyword:  earnings management; environmental information disclosure; environmental information management; substitution effect; public pressure;
Abstract: The earnings management is manipulating financial earnings,and environmental information management is manipulating the disclosure of environmental information. Then what is the relationship between them? Using the two-stage least squares method and the limited information maximum likelihood analysis,the paper finds the relationship between earnings management and environmental information management is not significant before the promulgation of Environmental Information Disclosure for Trial Implementation.However,after the promulgation,the firms have more incentives to manage environmental information,and the relationship between the earnings management and environmental information management turns negative significantly,increasing the substitution effect. Further studies show that the relationship is more significant in the heavy-polluting industries.This paper provides an effective way of supervising environmental information management behavior,namely by measuring the earnings management to judge the extent of environmental information management indirectly,and making further regulatory action.