Promoting Transparency from the Outside: Institutional Pressure, Green Innovation, and Environmental Information Disclosure Quality

Purpose: The environmental degradation caused by industrial development has become increasingly severe, prompting growing demands for firms to disclose environmental information and reduce pollution. Drawing on institutional theory, the literature on green innovation, and studies of environmental information disclosure, this study investigates how external institutional forces influence corporate environmental information disclosure quality (EIDQ). Moreover, by introducing green innovation as a mediating mechanism, the study examines whether institutional pressure merely induces superficial compliance with disclosure requirements or genuinely motivates firms to undertake substantive environmental protection actions. Design: The empirical analysis is based on micro-level data from heavily polluting publicly listed firms in China over the period 2012 to 2019. Findings: The results indicate that all three forms of institutional pressure significantly enhance corporate EIDQ. Specifically, coercive and normative pressures improve corporate EIDQ by promoting green innovation, while mimetic pressure has a negative effect on green innovation. Furthermore, heterogeneity analysis reveals that coercive pressure has a more pronounced positive effect on corporate EIDQ among large, heavily polluting enterprises. Originality/Value: This study constructs a comprehensive evaluation system for assessing the EIDQ of heavily polluting listed firms in China and uncovers the mechanism through which institutional pressure shapes disclosure quality. The findings contribute to and extend the literature on institutional pressure and corporate environmental information disclosure. © 2025 Taylor & Francis Group, LLC.