Mandatory Disclosures of Greenhouse Gas Emissions and Managerial Myopia: Evidence from the United States
研究美国2010年温室气体报告计划对上市公司管理者短视的影响，发现强制披露显著减少了管理者短视，机制是增加环保活动和加强市场约束。
Synopsis The research problem This study examined the impact of mandatory environmental disclosure regulations, specifically the 2010 Greenhouse Gas Reporting Program (GHGRP), on corporate managerial myopia in U.S. markets. Motivation Our study was motivated by the recent global landscape that is increasingly focused on carbon neutrality and sustainable practices. These regulatory advancements stress the urgency of addressing climate impact and create a shifting landscape that can profoundly impact the managerial behavior of companies. In light of this rapidly evolving regulatory environment, how do corporate managers respond to the transition from voluntary to mandatory disclosures? Do mandatory disclosure requirements redirect their focus from short-termism to long-term sustainability? These questions motivated us to examine the effect of mandatory greenhouse gas (GHG) disclosures on managerial myopia. The test hypotheses We hypothesized that firms subject to the GHGRP regulation experience a reduction in managerial myopia relative to non-GHGRP-compliant firms. Target population Our sample is a panel of U.S.-listed firms from 2005 to 2014. It comprises a treatment group of 604 firm-year observations subject to mandatory disclosures of GHG emissions under the 2010 GHGRP, and a control group of 16,934 non-GHGRP-compliant firm-year observations. Adopted methodology We used a two-way fixed-effects difference-in-differences (DiD) model in the baseline tests, cross-sectional analysis, and mechanism analysis; a propensity score-matching method was used for robustness. Analyses We used principal component analysis to extract the first component and construct an index of managerial myopia as the dependent variable. Our key variable of interest is DID, and it was assigned a value of 1 for firms mandated to report GHG from the policy introduction year in 2010 until the end of the sample period, 0 otherwise. We employed two-way fixed-effects DiD regression models to examine the impact of the GHG reporting mandate on managerial myopia and the mechanisms underlying the findings. Findings We found that the GHGRP’s implementation significantly attenuates firm-level managerial myopia. The result is robust to various robustness checks, including a placebo test, alternative measures, and changes in model specifications, supporting a causal inference of our DiD results. We show two plausible mechanisms for our findings: increased firm engagement in environmental-related activities and enhanced market discipline. Our cross-sectional analysis also offers strong support for these findings.