The transparency dividend: Effects of corporate environmental management information disclosure on green-tech FDIs in emerging-market cities

Cities in emerging markets increasingly shape sustainable development, yet the city-level characteristics attracting green-tech foreign direct investment (FDI) remain underexplored. Drawing on information cost economics, we conceptualize a city's corporate environmental management information disclosure (EMID) as an information-based regulatory feature that reduces foreign investors' information acquisition costs by transforming previously private firm-level environmental management knowledge into publicly accessible information. We further argue that the effectiveness of EMID depends not only on the availability of disclosed information but also on its quality, particularly its credibility and completeness. Using panel data for 2008–2023 from 285 Chinese cities, we find that higher EMID levels are associated with greater green-tech FDI inflows. Moreover, this positive relationship is strengthened by stringent environmental regulation, which enhances disclosure credibility, and is weakened by prevalent ESG underreporting, which undermines disclosure completeness. Our findings contribute to subnational FDI location research and the environmental regulation literature by demonstrating how local information environments shape green-tech investment allocation.