Purpose This study investigates whether and how trade frictions affect firms' sustainability disclosure. Additionally, it assesses the moderating effects of firms' industry, export and governance characteristics on this relationship. Design/methodology/approach This study uses a sample of Chinese A-share listed firms from 2006 to 2016. It designs a quasi-natural experiment based on antidumping and countervailing event shocks to conduct empirical analysis. Findings Firms exposed to trade frictions significantly enhance sustainability disclosure, especially in environmental and social aspects. Path analysis reveals that trade frictions prompt firms to enhance sustainability disclosure by intensifying product market competition and capital market financing constraints. Furthermore, the effect of trade frictions on sustainability disclosure is more pronounced among heavily polluting, manufacturing and innovative firms, firms with larger export scales and fewer export destinations, state-owned enterprises and firms with more internal control deficiencies and higher institutional shareholdings. Moreover, firms can mitigate the adverse impacts of trade frictions on risk management level, financing capability and operating performance by enhancing sustainability disclosure. Research limitations/implications This study has several limitations. First, we treat all firms subject to trade investigations uniformly, without distinguishing between different types of antidumping and countervailing measures. Future research can examine whether specific types of trade remedy measures trigger distinct disclosure responses and result in different outcomes. Second, our sample is restricted to Chinese listed firms from 2006 to 2016, a period predating the recent escalation of global trade tensions. Extended time periods can provide insights into the long-term effects of trade frictions on corporate behaviour. Third, our analysis focuses exclusively on China. Given significant cross-country differences in institutional contexts and sustainability priorities, such as some economies prioritising economic growth over environmental protection, future research can extend these findings by conducting comparative analyses across diverse institutional settings. Practical implications This study offers valuable insights for managers of different types of firms in making scientific sustainability disclosure decisions to cope with trade uncertainty and achieve sustainable development. It also provides implications for policymakers in improving sustainability disclosure systems to enhance corporate communication with both product and capital markets. Originality/value This study verifies the promoting effect of trade frictions on corporate sustainability disclosure, enriching the literature on trade frictions and sustainable development and deepening the understanding of corporate disclosure behaviours in response to negative external shocks.
Long et al. (2026) studied this question.