Factors affecting corporate environmental disclosure in emerging markets: The role of corporate governance structures

Abstract This study seeks to examine whether internal corporate governance (CG) mechanisms affect corporate environmental disclosure (CED) in emerging economies. Using a sample of 500 firm‐year observations, this study distinctively applies a linear panel quantile regression (PQR) model to examine the CG–CED nexus in Jordan. This technique is supplemented with conducting a two‐step dynamic generalised method of moment (GMM) model to overcome any potential occurrence of endogeneity problems. This study reports an increasing trend in CED practice among the sampled companies over the period of analysis, yet it is still at an early stage as compared with their developed counterparts. Furthermore, this study suggests that board size, board independence, CEO duality and foreign ownership have positive associations with CED. In contrast, managerial ownership, institutional ownership and ownership concentration are negatively associated with the disclosed amount of environmental information in the Jordanian context. Theoretically, board structures appeared to be more efficient than ownership structures in reducing agency conflicts by addressing the asymmetric gap of information and promoting the disclosure of environmental information. These findings add to the debate about whether ownership structures detrimental to CED in developing economies. Specifically, when it comes to spending money on CED, owners seemed to be more concerned about any reductions in their share of the pie and may, therefore, be less motivated to disclose their companies' environmental information. This paper provides managers, owners and policymakers with a set of context‐specific recommendations related to the crucial need for a more concerted effort to integrate governance and environmental regulations in order to ensure sustainability in emerging markets.