The Effects of Voting Ownership Concentration on Social and Environmental Disclosure: Empirical Evidence from Brazil

Abstract

Purpose-This study aims to analyze the effects of voting ownership concentration on the social and environmental disclosure of Brazilian companies in their Annual Financial Statements. Design/methodology/approach-Econometric models were estimated considering a sample of 1,252 annual observations of 252 companies in the period 2010-2014, and the social and environmental disclosure was measured through a lexical analysis performed by counting 75 words and key expressions related to social and environmental practices. Findings-Our findings suggest that the social and environmental disclosure of Brazilian companies is positively correlated with their voting ownership concentration. In addition, if the company is listed in the Corporate Sustainability Index or if it is in a potentially aggressive industry with respect to the environment, this also positively contributes to a higher degree of social and environmental disclosure. Originality/value-Our study contributes to the literature on social and environmental disclosure and its association with ownership structure by providing evidence in an emerging market characterized by a high concentration of control.

The efect of size on the relationship between control structure and voluntary disclosure in Brazilian companies

“…According to panel A, the variable (AP) is significant at 1% only for smaller companies (threshold 0), and its positive influence on the voluntary disclosure is (6.45%). This result is related with the findings of Allaya et al (2018), Karajeh (2020), Viana Junior and Crisóstomo 2019and Pontes Nunes et al (2020), who suggests that controlling shareholders would be more concerned with the reputation and legitimacy of the firms and, for this reason, they would be more willing to disclosure voluntary information (Viana Junior & Crisóstomo, 2019). In addition, smaller companies would have less visibility and be less susceptible to political costs, which would encourage disclosure of information to the market (Pontes Nunes et al 2020).…”

“…Country-specific characteristics and financial markets, such as the legal protection system for shareholders (Viana Junior & Crisóstomo, 2019) can affect firms' willingness to evidence information (Kolsi, 2017). This argument gains strength, with the absence of conclusive empirical evidence regarding the influence of the control structure on the information disclosure policy of firms (Jankensgärd, 2018).…”

Multi-level analysis of environmental disclosure by Brazilian and German firms

“…Ownership concentration has also been shown to have a positive impact on socioenvironmental disclosure in the Brazilian setting (Viana Junior & Crisóstomo, 2019). The authors pointed out that belonging to a sector that is potentially aggressive to the environment and being listed in the Corporate Sustainability Index also has a positive influence.…”

“…In the present study, the macro level is represented by the NBS, while the meso level was included to determine to what extent the business sector (or industry) influences the level of corporate environmental disclosure. This level of influence was studied by Young and Marais (2012), Li, Fetscherin, Alon, Lattelmann, and Yeh (2010), Silveira and Pfitscher (2013), Gamerschlag, Möller, and Verbeeten, (2011), Amorim (2015), Viana Junior and Crisóstomo (2019), and Campbell (2007), all of whom found an association between sector and disclosure, whether environmental, socioenvironmental, or overall CSR.…”

“…Several national and international authors have investigated the impact of institutional, sector-related, and organizational factors on the environment (de Mascena, Barakat, Isabella & Fischmann 2020;Kolk, 2010;Abreu, Cunha & Barlow, 2015;Soares et al 2020;Matten & Moon, 2008;Lattemann et al, 2009;Amorim, 2015;Delmas & Toffel, 2004;Viana Junior & Crisóstomo, 2019), but the present study takes one step further by comparing the institutional environments of two widely different economies (Germany and Brazil) while evaluating disclosure-related factors at multiple levels (country, sector, firm).…”