Do subsidies crowd out transparency? Institutional pressures and climate risk disclosure in SMEs

The findings indicate that coercive pressure from heavily polluting industry status and mimetic pressure significantly promote SMEs’ CRD, while coercive pressure from state-owned enterprise status and normative pressure from both NGO pressure and media attention have no significant impact on CRD. The findings show that coercive and mimetic pressures are positively associated with CRD, while normative pressure is insignificant overall.

Importantly, general subsidies weaken the effect of mimetic pressure, whereas environmental subsidies strengthen the effect of coercive pressure from heavily polluting industry status; NGO-related normative pressure becomes positive only among key-pollutant SMEs. The results suggest a trade-off in subsidy design, where broad subsidies may dilute peer-driven learning and disclosure incentives, whereas targeted environmental subsidies can complement regulatory pressure and improve climate risk disclosure among SMEs.</p>