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

Gerged, Ali Meftah

doi:10.1002/bse.2642

Cited by 171 publications

(192 citation statements)

References 113 publications

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“…This may be because of the growing wealth of institutional owners, which enables them to achieve economies of scale in the evaluation process, thereby allowing them to possess better knowledge about the market (Black, 1992). However, other studies failed to establish this positive and significant relationship between institutional ownership and financial performance (Drobetz et al , 2021; Gerged, 2021). According to Pertiwi and Hermanto (2017) and Sukmawardini and Ardiansari (2018), institutional ownership does not affect the firm value because the institutional side cannot effectively monitor the management.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 94%

The impact of ownership structure on corporate social responsibility: the moderating role of financial performance

Dakhli

2021

SBR

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Purpose The purpose of this paper is to investigate the relationship between ownership structure and corporate social responsibility (CSR). Specifically, this paper examines the impact of financial performance on the relationship between ownership structure and CSR. Design/methodology/approach This study uses panel data set of 200 French firms listed during 2007–2018 period. The direct and moderating effects were tested by using multiple regression technique. Findings The results indicate that investors have different attitudes toward CSR engagement. While institutional ownership affects positively CSR engagement, managerial ownership shows a negative effect. Findings also show that financial performance accentuates these effects. Research limitations/implications The findings have practical implications that may be useful to regulators and managers interested in enhancing CSR. For regulators, the results advise policymakers to restrict managerial ownership and promote institutional investments to improve CSR. For managers, the results suggest developing more sophisticated intervention mechanisms to deal with conflicting voices that could result from different owners’ attitudes toward CSR. As an extension to this research, further study can examine the impact of audit quality on CSR. Originality/value This study proposes the establishment of dynamic links between ownership structure and CSR around firm financial performance. In addition, it investigates not only the overall CSR ratings but also each of CSR pillars, namely, environmental, social and governance.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 94%

The impact of ownership structure on corporate social responsibility: the moderating role of financial performance

Dakhli

2021

SBR

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“…Drawing on previous studies (e.g., Gerged, 2020; Gerged, Beddewela, & Cowton, 2020; Moumen, Othman, & Hussainey, 2015; Reguera‐Alvarado, Blanco‐Oliver, & Martín‐Ruiz, 2016; Roberts & Whited, 2013; Ullah et al, 2018, among others), we use a two‐step dynamic GMM regression model as an additional check to address the endogeneity concerns arising from reverse causality association between GHG and COC. Fundamentally, we incorporate the lagged versions of past GHG to make a distinction between a ‘static’ and a ‘dynamic’ panel data model.…”

Section: Empirical Findings and Econometric Strategymentioning

confidence: 99%

Mandatory disclosure, greenhouse gas emissions and the cost of equity capital: UK evidence of a U‐shaped relationship

2020

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This paper examines the effects of disclosing greenhouse gas (GHG) information mandatorily on the cost of equity capital (COC) using a longitudinal unbalanced panel database of the United Kingdom's FTSE 350 firms for the period 2011–2016. We use a nonlinear panel quantile regression (PQR) model to examine the relationship between GHG disclosure (GHGD) and COC in the United Kingdom. This technique was supplemented by conducting a two‐step generalised method of moment (GMM) estimation to address any concerns related to the potential existence of endogeneity problems. Our findings suggest that high‐level GHGD appeared to be negatively associated with COC up to a certain level, which is known as the turning point; then, any increase in GHGD is likely to increase the COC. This means that the nonlinear association between GHGD and COC is evidenced in our study and takes a U shape. Likewise, our findings are associative of a moderating effect of the 2013 carbon disclosure regulation (CDR) on the GHGD–COC nexus. We argue that mandatory GHGD and GHG risk are linked so that those companies that are associated with higher GHG risk have a tendency to be better disclosers. Consequently, we urge regulators to design GHGD regulations in a way that mirrors corporate environmental risk and leads to a lower COC in order to align the interests of corporations with those of the society at large.

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“…Besides, previous scholarship suggests that corporate compliance with good CG arrangements can be positively attributed to increasing CED (e.g. D'Amico et al , 2016; Ezhilarasi and Kabra, 2017; Fernandes et al , 2019; Gerged, 2021). In Sri Lanka, the first draft of the Sri Lankan Corporate Governance Code (SLCGC) was established in 1997 by the institute of chartered accountants.…”

Section: Introductionmentioning

confidence: 96%

“…Global economic development has generated detrimental environmental impacts such as carbon emissions, global warming, and natural disasters. Corporations have thus been compelled to engage proactively in Corporate Environmental Disclosures (CED) (Belal and Momin, 2009;Belal et al, 2010;Campbell, 2004;Gerged et al, 2021a) to mitigate the potential risks to their financial and economic sustainability created by their environmental practices (Gray, 2000). CED is defined by Wilmshurst and Frost (2000) as the impact of business operations and activities on the natural and physical environment in which the company operates.…”

Section: Introductionmentioning

confidence: 99%

“…There is a dearth of extant empirical research from developing countries, pertaining to environmental and social accounting and disclosure in general (Adhariani and du Toit, 2020;Belal, 2001;Belal and Cooper, 2011;Diab and Metwally, 2020;Gerged et al, 2020a;Welbeck et al, 2020). For instance, most extant disclosure studies are focused upon developed countries such as Australia, the United Kingdom and Europe (See Robert, 1991;Gray et al, 1995;Deegan and Gordon,1996;Deegan et al, 2002;Campbell, 2004;Cowan and Gadenne, 2005;Rao et al, 2012;Burgwal and Vieira, 2014;Yu and Zhao, 2015;Albitar et al, 2020) and upon emerging economies such as Malaysia, Hong Kong and China (e.g., Gao et al, 2005;Smith et al, 2007;Qu et al, 2013).…”

Section: Introductionmentioning

confidence: 99%

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Determinants of corporate environmental disclosures in Sri Lanka: the role of corporate governance

Nuskiya

Ekanayake

Beddewela

et al. 2021

JAEE

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PurposeThis study explores the levels of and trends in corporate environmental disclosure (CED) among a sample of Sri Lankan listed companies from 2015 to 2019. Furthermore, this article examines the firm-level determinants of CED, including corporate governance (CG) mechanisms, in Sri Lanka from a multi-theoretical perspective.Design/methodology/approachUsing a sample of 205 firm-year observations, this paper distinctively applies a panel quantile regression (PQR) model to examine the determinants of CED in Sri Lanka. This method was supported by estimating a two-step generalized method of moment (GMM) model to tackle any possible existence of endogeneity concerns.FindingsThe authors’ findings indicate an increasing trend in CED practice among the sampled companies (i.e. 41 firms, the only adopters of the GRI framework) in Sri Lanka from 2015 to 2019. However, it is still considered at an early stage compared with other developed counterparts. Furthermore, this study suggests that board size, board independence, board meetings, industry type, profitability and firm size are positively associated with CED level. In contrast, and consistent with our expectation, CEO duality is negatively attributed to the disclosed amount of environmental information in the Sri Lankan context.Research limitations/implicationsThe authors’ empirical evidence reiterates the crucial need to propagate and promote further substantive CG reforms, mandating CED in Sri Lanka.Originality/valueThe authors’ findings provide much-needed insights for indigenous companies, operating across similar emerging economies, to understand how CED can be incorporated into their reporting process based on the GRI framework in order to enhance their firm value, reduce legitimacy gaps and mitigate other operational risks.

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

Cited by 171 publications

References 113 publications

The impact of ownership structure on corporate social responsibility: the moderating role of financial performance

The impact of ownership structure on corporate social responsibility: the moderating role of financial performance

Mandatory disclosure, greenhouse gas emissions and the cost of equity capital: UK evidence of a U‐shaped relationship

Determinants of corporate environmental disclosures in Sri Lanka: the role of corporate governance

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