Empowering Green Development: How Social Media Interaction Influences Environmental Information Disclosure of High-Polluting Firms.

While social media has become increasingly prevalent in recent years, few studies have examined the role of social media in regulating the environmental information disclosure (EID) of high-polluting enterprises. Using a sample of 2, 211 A-share listed firms in China from 2010 to 2019, this study empirically tests the relationship between firm-investor social media interactions and the EID of high-polluting firms. The results show that social media interaction not only relieves information asymmetry in the capital market, but also triggers market and regulatory pressure for management, ultimately contributing to high-quality EID. The results are robust to a series of alternative estimation approaches and alternative measurements of core variables. Moreover, we found that the positive effect of social media interaction on EID is stronger for enterprises that receive a high level of analyst coverage and for state-owned enterprises (SOEs), but weaker for enterprises whose CEO holds a chairman position (i.e., CEO duality). In addition, further testing shows that social media interaction promotes hard EID to a larger extent than soft information, and the promotion effect is more pronounced for environment-related posts. This study deepens our understanding of how social media supplements formal regulations in the supervision of corporate EID behavior and offers important practical implications for prompting enterprises to achieve high-quality green development.