The Moderating Role of Internal Control on The Relationship between Carbon Disclosure Quality and Corporate Economic Value: Based on Chinese Listed Companies

Abstract

Sustainable value creation has become an important goal for modern corporations. Among the key drivers, carbon disclosure quality (CDQ) has received growing attention. However, existing studies report mixed results on its impact on corporate economic value (CEV). In addition, little is known about the role of internal control (IC) in this relationship. This study investigates the effect of CDQ on CEV and examines whether IC strengthens this link. It uses panel data from A-share listed companies in China, covering the period from 2010 to 2023. A fixed effects regression model is applied to control for unobserved firm-level heterogeneity. The findings show that higher CDQ is associated with improved CEV. Moreover, an effective IC enhances this positive relationship. These results suggest that internal governance mechanisms can help firms translate carbon disclosure into economic value. Further analysis shows that the effect of CDQ varies across firm types. The positive impact is more evident in non-heavily polluting industries, non-state-owned enterprises, and companies not audited by Big Four accounting firms. This study contributes to the literature on corporate sustainability. It highlights how disclosure quality and internal governance jointly influence firm value under different organizational contexts.