Environmental policy disclosures and sustainable development: Determinants, measure and impact on firm value for ADX listed companies

Abstract

Corporate social responsibility (CSR) disclosures have gained great attention in both the media and the academic community for many decades. In this paper, we shed light on three aspects of CSR disclosures, namely the determinants, measure and impact on firm value. Using a sample of 61 firms listed on the ADX for the period 2010-2014 and computing an eight-item index, our results are conclusive and show that listing history, governmental sector, board size, financial leverage and firm size have a positive impact on CSR disclosures. By contrast, firm profitability, industrial sector and ownership concentration have no impact on the extent of CSR disclosures.Finally, CSR disclosures have no impact on firm value as proxied by market-to-book ratio. Our results remain unchanged using additional robustness checks. Our study highlights the three aspects of social disclosures (i.e. determinants, measure and impact) in an emerging stock market (ADX). Our findings will help investors when assessing firm value and policy makers when issuing CSR disclosure rules.

Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey

“…Hence, high financial leverage will encourage firms to disclose more environmental information. The results of several studies provide support for this expectation (Clarkson et al, 2008;Huang & Kung, 2010;Zeng et al, 2012;Guidry & Patten, 2012;Juhmani, 2014;Sulaiman et al, 2014;Yildiz et al, 2016;Ismail et al, 2018;Kolsi & Attayah, 2018). Accordingly, we state the following hypothesis:…”

“…Hackston & Milne, 1996;Patten, 2002;Brammer & Pavelin, 2006;Liu & Anbumozhi, 2009;Huang & Kung, 2010;Wang et al, 2012;Lu, 2014;Akbaş, 2014;Fontana et al, 2015;Welbeck et al, 2017;Ismail et al, 2018;Ofoegbu et al, 2018;Ashfaq & Rui, 2019). However, some studies reported an insignificant relation between industry type and environmental disclosure (Braam et al, 2016;Ahmadi & Bouri, 2017;Kolsi & Attayah, 2018;Kılıç & Kuzey, 2019;Akbaş & Canikli, 2019;Kouloukoui et al, 2019).…”

The effect of the board on corporate social responsibility: bibliometric and social network analysis

“…checklist, counting words and sentences (Appuhami & Tashakor, 2017;Barakat et al, 2015;Jizi et al, 2014;Khan et al, 2013;Kolsi & Attayah, 2018;Sharif & Rashid, 2014;Zaid et al, 2019). Other studies measure CSRD using ESG rating depending on Bloomberg database (Al-Dah et al, 2018;Cucari et al, 2018;Giannarakis et al, 2014), and by using KPMG international surveys of CSR reporting (Fernandez-Feijoo et al, 2014), using a dummy variable (Liao et al, 2018;Pucheta-Martinez & Chiva-Ortells, 2018), Dow Jones Sustainability Indices (Chang et al, 2017), and GRI database (Cabeza-Garcia et al, 2018;Fuente et al, 2017).…”

Analyst coverage and forecast accuracy when CSR reports improve stakeholder engagement: The Global Reporting Initiative‐International Finance Corporation disclosure strategy

“…In addition, we provide empirical confirmation that implementation of the GRI‐IFC disclosure strategy is associated with greater accuracy in analysts' forecasts. This new information communication strategy could overcome the lack of investor confidence in CSR reports that has been referred to in previous research (Carnevale et al, ; Kolsi & Attayah, ; Murray et al, ; Solomon & Solomon, ) and reinforce the usefulness of the CSR disclosure items that represent the company's commitment to its stakeholders (Brown‐Liburd & Zamora, ).…”

“…However, several authors have commented that CSR reporting does not necessarily provide useful information for shareholders (Carnevale et al, ; Kolsi & Attayah, ; Murray et al, ; Solomon & Solomon, ). In this vein, García‐Sánchez and Noguera‐Gámez (, ) observed that key financial and nonfinancial information should be published in order to reduce information asymmetry and to support confidence among investors.…”