Corporate strategic positioning and environmental information disclosure under circular economy: evidence from China

Abstract

Purpose

The authors intend to investigate the relations between corporate strategic positioning and environmental information disclosure (EID) behaviors in the context of the circular economy. The authors argue that the development of the circular economy is crucial to address environmental issues and achieve sustainable development, and companies play a vital role in this process as micro-entities. By examining corporate EID behaviors, the authors could understand their adoption of circular practices to a certain extent.

Design/methodology/approach

The authors conduct a content analysis of companies' annual fiscal reports, social responsibility reports and environmental reports and develop text-based proxies for both strategic positioning and EID quality to explore the relationship between them.

Findings

The authors find that corporate strategic positioning does affect corporate EID behaviors. Specifically, firms that implement a prospector strategy are more likely to engage in high-quality EID. Furthermore, the results suggest that green innovation is one of the mediators through which strategic positioning affects EID. Compared with defenders, prospectors are more likely to engage in green innovation, which, in turn, leads to higher-quality EID and demonstrates a more active approach to the circular economy.

Originality/value

This study contributes to the literature on strategic positioning and corporate EID by providing empirical evidence on the impact of corporate strategic positioning on EID behaviors. Moreover, the study employs a textual analysis approach to measure corporate strategy and EID, which is a relatively new research method in this field.

Citation

Gu, Y., Wu, P. and Du, R. (2023), "Corporate strategic positioning and environmental information disclosure under circular economy: evidence from China", Management Decision, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MD-02-2023-0301