The Belt and Road Initiative: Industry Competition and Corporate Environmental Information Disclosure in China

The Belt and Road Initiative (BRI) is a significant Chinese strategic measure designed to construct a platform for multinational cooperation. The study investigates whether the BRI construction influences corporate environmental information disclosure (EID) and whether the industry competition moderates their relationship. Adopting the legitimacy theory, we assume that firms focus more on EID to differentiate themselves after the BRI construction, especially amongst fierce competition where firms apply the EID strategy more for higher legitimacy. Taking the BRI construction in 2014 as an exogenous shock, we use a difference-in-differences method (DID) and propensity score matching difference-in-differences method (PSM-DID) based on the panel data of 4099 A-share listed firms from 2008 to 2022 and take the parallel trend and placebo tests for the robustness. We reveal a significant improvement in the EID of firms within the BRI stock sector following its establishment, with the effect of the BRI construction being further strengthened by industry competition. Leveraging legitimacy theory, the paper sheds light on the motivations behind EID and how industry competition serves as a moderating factor of the EID-promoting effects brought by the BRI construction.