Journal of Applied Finance & Banking

The Impact of Carbon Disclosure on Business Valuation

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• Abstract

   

  Against the backdrop of accelerating global carbon neutrality and deepening Paris Agreement rules, this study explores the economic impacts of carbon disclosure (CD), a key link between corporate environmental governance and capital market valuation. Using panel data of Chinese A-share listed firms (2015–2022), we employ fixed-effects models, mediation tests, and regression analyses to examine CD’s effects on firm valuation. Key findings include: (1) one unit increase in CD level raises valuation by 8.6%; (2) CD’s valuation boost is stronger for non-state-owned and manufacturing firms; (3) Introducing the SA index to measure financing constraints reveals a mediating mechanism: CD alleviates information friction, reduces financing constraints, and improves investment efficiency. The study empirically supports refining CD systems and environmental governance strategies, while innovatively integrating stakeholder theory with dynamic valuation models to expand the frontiers of firm valuation research.

   

  JEL classification numbers: G34, G38, G39.

  Keywords: Carbon disclosure, Corporate valuation, Financing constraints, Sustainable development.