Benefits of environmental information disclosure in managing water pollution: evidence from a quasi-natural experiment in China

Environmental information disclosure (EID) is playing an increasingly important role in water pollution management. However, since EID is hard to measure and other endogeneity problems, it is difficult to capture the causal inference between the two. Using the difference-in-difference method, this paper takes advantage of the Pollution Source Regulatory Information Disclosure Index (PITI) program promulgated by China in 2008 as a quasi-natural experiment to empirically capture the net effect of EID on water pollution management and its impact mechanism. The results show that from the average treatment effects perspective, the PITI strongly promote water pollution management. However, the dynamic effects of PITI present a decreasing and weakening trend over time. Further mechanism analysis reveals that PITI improves water pollution management mainly through the technological innovation effect. Several robustness checks justify our findings. Heterogeneity analysis shows that the PITI has a greater positive impact on water pollution management in cities located in the southern areas and with high economic levels and with a larger population.