General Versus Specific Disclosure: A Regime and Quantile Analysis of Environmental Reporting and Firm Profitability in China

This study examines the impact of environmental disclosures on firm profitability, focusing on the differential effects of broad Corporate Social Responsibility reporting versus specific carbon emissions transparency. While average-effects models show that general CSR disclosure does not significantly influence financial performance, quantile regressions reveal heterogeneous effects across the performance distribution, indicating that disclosure can matter for firms at different profitability levels. Carbon emissions intensity shows a heterogeneous pattern across the performance distribution. It is insignificant among low-performing firms but becomes positive for higher-performing firms, suggesting that only stronger firms are able to manage or offset the costs associated with more carbon-intensive activities. Enhanced transparency in carbon emissions at elevated levels is associated with moderated adverse financial effects, a pattern consistent with theoretical mechanisms involving stakeholder accountability and cleaner technology adoption, though the causal nature of this association is not established by the present study. Firm characteristics such as size, leverage, and liquidity also shape financial outcomes alongside environmental performance. The findings support theoretical frameworks emphasizing the importance of precise, measurable environmental information for firm-level accounting profitability. The study does not test green growth outcomes such as emissions reductions or ecological decoupling; rather, it documents how environmental disclosure practices associate with ROA, offering a firm-level financial perspective on corporate transparency. Implications for policy include prioritizing standardized emissions reporting and targeted incentives to improve resource allocation within firms.