Cultural norms and corporate green transition disclosure: Unveiling the role of green innovation, social responsibility, and managerial myopia

Abstract

Driven by China’s “dual carbon” goals, improving corporate green transition disclosure (GTD) systems has become a key path to achieving sustainable economic development. As China has yet to establish formal GTD institutions, this paper explores why companies voluntarily disclose their green transition information from the perspective of Confucian culture, an informal institution factor. Based on the “Management Discussion and Analysis” sections in corporate annual reports from 2007 to 2022, we use semantic recognition from machine learning models and text analysis to measure managers’ focus on green transition through two dimensions—innovation-driven initiatives and political compliance norms—to construct a GTD index. The findings show that a one-standard-deviation increase in Confucian cultural influence leads to a 3.61-standard-deviation increase in GTD. Confucian culture promotes GTD by curbing managers’ self-interest motives, encouraging green innovation, and fostering social responsibility. Furthermore, strengthened external environmental regulations and reduced environmental uncertainty amplify the positive effects of Confucian culture. Notably, the CEOs’ academic backgrounds reinforce these effects, whereas the presence of female executives attenuates them. This study offers methodological insights for quantifying firm-level GTD and provides a novel institutional perspective for evaluating green transition progress across countries and regions.