Understanding Carbon Disclosure in Chinese Manufacturing: The Role of Managerial Ownership and Analyst Coverage

This research explores the intricate relationship between managerial ownership, analyst coverage, and carbon disclosure practices within Chinese manufacturing firms. Drawing from corporate governance, agency, and institutional theories, it employs logit and probit regressions to analyze data from a sample of these firms. The findings indicate that higher levels of managerial ownership correlate with reduced carbon disclosure, reflecting a prioritization of short-term profitability over environmental transparency. Conversely, more excellent analyst coverage positively influences carbon disclosure, indicating external market pressures driving firms to enhance ecological reporting. Additionally, the interaction between managerial ownership and analyst coverage moderates the relationship, highlighting the nuanced interplay between internal ownership structures and external market forces. Theoretical implications underscore the significant role of governance mechanisms and market dynamics in shaping firms' environmental transparency efforts. In contrast, policy implications advocate for regulatory interventions and market mechanisms to promote sustainability governance and enhance ecological disclosure practices. Future research avenues include exploring the underlying mechanisms guiding firms' carbon disclosure decisions, conducting longitudinal studies to track temporal trends, and comparative analysis to identify best practices across different regions and industries. This research provides valuable insights for stakeholders aiming to foster sustainability and accountability in the Chinese manufacturing sector.