Carbon disclosure policy, external financing needs and the cost of capital: Does financial market quality matter?

We investigate whether the quality of financial markets matters for relationship between net external financing, voluntary carbon disclosure and firms' cost capital. External financing needs may create incentives firms to engage in environmental strategies, such as disclosing their emissions response demands from stakeholders. In countries with low market quality, build a reputation when complying stakeholders' demands. these countries, high be rewarded lower Using an international sample 24,253 firm-year observations 35 we show that higher previous year, more likely they are disclose current year. Moreover, positive association likelihood is stronger quality. further have capital compared needs. This evidence also differs versus