Corporate social responsibility and financial performance: bidirectional relationship and mediating effect of customer loyalty: investigation in Sweden

Hichri, Abir; Ltifi, Moez

doi:10.1108/cg-10-2020-0472

Cited by 14 publications

(17 citation statements)

References 103 publications

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“…The bidirectional relationship between the CSR disclosure and the financial performance has also been investigated. Hichri and Ltifi (2021) confirmed that these two variables have a positive and reciprocal impacts on each other. This result indicates that the CSR activities undertaken by the company improve its financial performance.…”

Section: Literature Review and Hypotheses Developmentsupporting

confidence: 56%

Impact of ESG disclosure and financial reporting quality on investment efficiency

Ellili

2022

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Purpose This study aims to examine the impacts of environmental, social and governance (ESG) disclosure and financial reporting quality (FRQ) on investment efficiency. Design/methodology/approach Several econometric models have been applied to estimate the impacts of ESG disclosure and FRQ on investment efficiency, using the United Arab Emirates (UAE) as a sample in 2010–2019. Estimations considered subsamples of underinvestment, overinvestment and low and high FRQ values. Findings Empirical results show a positive relationship between ESG disclosure, FRQ and investment efficiency, and that this relationship is more important in the underinvestment and high FRQ sub-samples. Results suggest that ESG disclosure improves transparency, mitigates information asymmetry and enhances investment efficiency. Research limitations/implications The findings could help UAE regulators incorporate ESG information into reporting and implement effective mechanisms to increase the extent of ESG information to improve investment efficiency. This study only examined UAE traded companies. Future research should investigate other factors influencing investment efficiency and conduct comparative studies across Gulf Cooperation Council countries. Social implications This study reveals the significant positive impact of ESG disclosure and FRQ on investment efficiency. These findings will help companies optimize their ESG information disclosure, improve the quality of their financial reports and comply with ESG standards. The study aims to develop knowledge that will not only benefit companies regarding the potential impact of ESG disclosure but also help national and international society create a better social environment and reduce climate change. Originality/value To the best of the authors’ knowledge, this study is the first to examine the relationship between ESG disclosure, FRQ and corporate investment efficiency. The research contributes to understanding the financial impacts of ESG disclosure and FRQ and supports regulators’ efforts to enforce ESG disclosure and improve FRQ.

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Section: Literature Review and Hypotheses Developmentsupporting

confidence: 56%

Impact of ESG disclosure and financial reporting quality on investment efficiency

Ellili

2022

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“…Therefore, disclosing more information about the company’s social performance receives the respect of stakeholders, which improves the company’s performance in the financial market (Naseem et al , 2019). In this sense, ESG complied firms are more likely to achieve higher returns and better performance by appeasing the expectations of different groups in the financial markets (Ben Saad and Belkacem, 2022; Hichri and Ltifi, 2021).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…Engaging in nonfinancial activities is one of the major tactics that enterprises must undertake to draw more stakeholders’ attention (Amoah and Eweje, 2022; Ananzeh et al , 2022). Those nonfinancial activities (such as sustainability and environmental activities) that focus on a broader segment of stakeholders rather than just shareholders have been proposed to increase financial performance (Hichri and Ltifi, 2021; Ben Saad and Belkacem, 2022).…”

Section: Introductionmentioning

confidence: 99%

Environmental, social and governance impact on financial performance: evidence from the Levant countries

Amosh

Khatib

Ananzeh

2022

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Purpose This paper aims to investigate whether the sustainability disclosure with the environmental, social and governance (ESG) aspects has an impact on the financial performance represented by Tobin’s Q, return on assets (ROA) and return on equity indices in the Levant countries for the period 2012–2019, which was a period of turmoil and political repercussions that affected the countries of the region. Design/methodology/approach Using the content analysis technique, the data was collected from 124 nonfinancial companies from Levant countries (Jordan, Palestine, Syria and Lebanon), and 883 observations were collected as panel data for the research analysis. Findings The findings indicate that the environmental, social and ESG collective performance maximizes financial performance, while the governance performance influences ROA only. This suggests that companies pay great attention to various stakeholders, mainly external. Maximizing stakeholder value remains an optimal strategy to achieve the company’s financial goals. Thus, improving the disclosure levels of nonfinancial performance in the capital markets will improve the chances of growth of the financial performance indicators of companies. Originality/value The study provided insights about the ESG role and its impact on the financial performance of companies in a less explored context by previous literature, namely, the Levant.

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“…present the effect of social and ethical practices correlated to the ESG scores. Additionally,Hichri and Ltifi (2021) demonstrate the relevance of CSR in the financial performance of Sweden firms Alareeni and Hamdan (2020). study how ESG scores affect the US S&P 500-listed firms.…”

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confidence: 99%

Voluntary adoption of integrated reporting, effective legal system and the cost of equity

Zaro

Flores

Fasan

et al. 2022

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Purpose Integrated reporting (IR) provides integrated financial and nonfinancial information about companies based on the integrated thinking principle. This study aims to investigate how the cost of equity relates to IR disclosure and the impact of an effective legal system on this relationship. Effective legal system (“enforcement”) represents the strength of the legal system of a country. Although voluntary initiatives are essentially not based on regulations, the authors expect that the effective legal system will influence the implementation of such. Design/methodology/approach To test the study’s hypotheses, linear regressions were applied using the Thomson Reuters database to analyze 20,463 firm-year observations between 2010 and 2017. The treatment group comprised companies that adopted IR; using propensity score matching, the authors defined the control group. The authors adopted a research design based on difference-in-differences to compare the cost of the capital of treatment with the control group for the periods before and after the IR adoption. Findings The results indicate that IR disclosure is negatively related to the cost of equity, and this negative effect is more prevalent for companies operating in high-enforcement environments. Research limitations/implications Cost of equity is not a directly observable variable, implying that the results are sensitive to changes in the parameters that are used to compute this term. The results can help companies looking for evidence of potential effective gains of adopting IR. They also help understand that discussions related to environment, social, and governance information are somehow incorporated by analysts and investors, and reflected in the cost of raising funds. Originality/value This study demonstrates how IR relates to the cost of equity considering a global sample of voluntary adopters. It also analyzes the impact of institutional factors on this relationship by using a robust method of analysis. The results support the argument that companies in a strong legal system are more likely to behave sustainably and to disclose this attitude. Additionally, they are pressured to implement proposals rather than just adopting an initiative as a label.

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Corporate social responsibility and financial performance: bidirectional relationship and mediating effect of customer loyalty: investigation in Sweden

Cited by 14 publications

References 103 publications

Impact of ESG disclosure and financial reporting quality on investment efficiency

Impact of ESG disclosure and financial reporting quality on investment efficiency

Environmental, social and governance impact on financial performance: evidence from the Levant countries

Voluntary adoption of integrated reporting, effective legal system and the cost of equity

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