Impact of corporate sustainability reporting on firm performance: an empirical examination in Asia

2018 ◽  
Vol 12 (4) ◽  
pp. 571-593 ◽  
Author(s):  
Najul Laskar
Keyword(s):  
Developing Countries ◽  
Logistic Regression ◽  
Content Analysis ◽  
Firm Performance ◽  
South Korea ◽  
Logistic Regression Model ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to analyse the impact of corporate sustainability reporting on firm performance in four Asian countries – Japan, South Korea, Indonesia and India – and to find out whether there is any significant difference between developed and developing countries of Asia with respect to the impact of such reporting on firm performance. Design/methodology/approach The study is based on 36 listed nonfinancial companies from Japan, 28 from India, 26 from South Korea and 21 from Indonesia respectively, from 2009 to 2014. Content analysis (binary −0 and 1) is used to calculate the disclosure score of sustainability performance, based on Global Reporting Initiative (GRI) format. The outcome of the content analysis is further used to examine the impact of corporate sustainability reporting on firm performance employing a logistic regression model. Findings The study finds that the average level of disclosure is more in the case of Japanese companies (90 per cent), followed by India (88 per cent) and South Korea (85 per cent). On the other hand, the average level of disclosure is only 72 per cent for Indonesian firms. Regression results depict a significant positive association between sustainability reporting and firm’s performance. The study further finds that the relative impact of sustainability reporting on firm performance is more in developed countries than in developing countries of Asia. Originality/value This is the first comprehensive study in Asian context to examine the impact of the level of corporate sustainability disclosure on the firm performance by using the logistic regression model. The outcome of this study would not only help the corporate managers but also the policymakers to make a valuable decision, which will eventually contribute to the objectives of sustainable development.

Disclosure of corporate sustainability performance and firm performance in Asia

2018 ◽  
Vol 26 (4) ◽  
pp. 414-443 ◽  
Author(s):  
Najul Laskar ◽  
Santi Gopal Maji
Keyword(s):  
Developing Countries ◽  
Firm Performance ◽  
Panel Data ◽  
South Korea ◽  
Regression Model ◽  
Corporate Sustainability ◽  
Content Type ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
The Impact

Purpose The purpose of this paper is to examine the disclosure pattern of corporate sustainability (CS) and the influence of sustainability reporting on firm performance of four countries in Asia – Japan, South Korea, Indonesia and India. Design/methodology/approach The authors have collected the sustainability reports and annual reports of 111 firms from four Asian countries for a period of six years. Based on the framework of Global Reporting Initiatives (GRI, 3 and 3.1), content analysis is used for calculating the disclosure score of corporate sustainability performance (CSP). These scores are further used to examine the impact on firm performance by employing a panel data regression model. Findings The study finds that the average level and quality of disclosure are the highest for Japanese firms, followed by India and South Korea. However, in the case of Indonesia, the average score is very low. Further, the study finds a significant difference in the disclosure of overall sustainability as well as components of sustainability between the countries. The regression results indicate the positive impact of CSP (both in terms of level and quality) on MBR. Specifically, the outcome of the regression model reveals that both the level and quality disclosure of CS are crucial for enhancing firm value for both the developed and developing countries of Asia. Moreover, the relative influence of CSP (both in terms of level and quality) on firm performance is found to be more in developed countries than the developing countries of Asia. Originality/value This is the first comprehensive study in the Asian context to investigate the disclosure pattern of CSP and also examine the association between CSP and firm performance by employing the panel data model. The outcome of this study is useful for policy implication.

Corporate sustainability reporting practices in India: myth or reality?

2016 ◽  
Vol 12 (4) ◽  
pp. 625-641 ◽  
Author(s):  
Najul Laskar ◽  
Santi Gopal Maji
Keyword(s):  
Firm Performance ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Annual Reports ◽  
Coding System ◽  
Content Type ◽  
Reporting Practices ◽  
Sustainability Practices ◽  
The Impact

Purpose The purpose of this paper is to look into the sustainability practices of Indian firms in terms of the quality of disclosure, the impact of corporate sustainability performance (CSP) on firm performance and the appropriateness of the sustainability reporting guidelines followed by the firms. Design/methodology/approach The present study is based on secondary data collected from annual reports and corporate sustainability reports of 28 listed Indian non-financial firms from 2008-2009 to 2013-2014. Content analysis is used to calculate the score in terms of level (binary coding system) and quality of disclosure (four-point scale). These scores are further used to examine the impact of CSP on firm performance by using an appropriate regression model. Findings The study finds that the average level of disclosure is 88 per cent, whereas the quality of disclosure is nearly 80 per cent. The influence of CSP (in terms of level and quality disclosure) on firm performance is positive and significant. Moreover, the study also reveals that the Global Reporting Initiatives framework is not sufficient enough to publish the sustainability report of any business concern. The outcomes of the study, thus, indicate that sustainability practices of Indian firms are not myth but approaching toward reality. Originality/value It is the first comprehensive study in India to analyze the corporate sustainability reporting practices encompassing different dimensions of sustainability.

Factors influencing corporate sustainability disclosure practices: empirical evidence from Indian National Stock Exchange

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kishore Kumar ◽  
Ranjita Kumari ◽  
Archana Poonia ◽  
Rakesh Kumar
Keyword(s):  
Empirical Evidence ◽  
Information Disclosure ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Free Cash Flow ◽  
Government Ownership ◽  
Content Type ◽  
Flow Capacity ◽  
Sustainability Disclosure ◽  
The Impact

Purpose This study aims to evaluate the nature and extent of sustainability disclosure practices of publicly listed companies in India. Further, it investigates the impact of potential determinants on the sustainability disclosure of companies. Design/methodology/approach The study analyzes data of 75 top listed nonbanking companies operating in India included in NIFTY100 Index for the years 2014-2015 to 2018-2019. In the present study, environment, social and governance disclosure dimensions were considered to evaluate the sustainability reporting performance of companies using content analysis. Panel data analysis was conducted to investigate the impact of various factors on the extent of sustainability information disclosure. Findings Results indicate that environmentally polluting industries disclose significantly higher sustainability information than non-polluting industries in India. The empirical findings suggest that determinants such as company size, age, free cash flow capacity, government ownership and global reporting initiative (GRI) usage positively related to the extent of corporate sustainability disclosure. Contrary to the expectations, financial leverage and profitability were found to be negatively related to the sustainability disclosure of companies in India. Practical implications This study provides empirical evidence for regulators, practitioners and corporate strategists to assess the progress in the sustainability reporting landscape in India. The finding implies that large and established companies can reduce legitimacy costs through higher sustainability information disclosure. Interestingly, this premise did not hold in the case of high leveraged and profitable companies. Overall findings can also help policymakers to incorporate necessary reforms to improve sustainability reporting in India. Originality/value This study is one of the first studies to investigate the nature, extent and potential determinants of corporate sustainability disclosure in India. The paper adds to the existing literature on sustainability reporting by providing empirical evidence on the relationship between sustainability reporting and potential determinants such as government ownership, size, leverage, profitability, age, free cash flow capacity, industry and GRI usage.

scholarly journals Sustainability reporting challenges in developing countries: towards management perceptions research evidence-based practices

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Venancio Tauringana
Keyword(s):  
Developing Countries ◽  
Research Evidence ◽  
Sustainability Reporting ◽  
Policy Formulation ◽  
Global Reporting Initiative ◽  
Evidence Based ◽  
Evidence Based Practices ◽  
Content Type ◽  
Awareness Campaigns ◽  
The Impact

PurposeThe purpose of this paper is threefold. First, it aims to identify managerial perceptions-based research determinants of sustainability reporting. Second, it sets out to evaluate the impact of the Global Reporting Initiative (GRI) efforts in increasing SR in developing countries. Third, the researcher argues for the adoption of management perceptions research evidence-based practices (EBP) to address SR challenges in developing countries.Design/methodology/approachThe study was undertaken using a desk-based review of management perceptions-based research literature on the determinants of SR. The impact of GRI efforts in increasing adoption of SR was undertaken through both desk-based research and descriptive analysis of data obtained from the GRI database from 2014 to 2019 relating to 107 developing countries. The call for the adoption of management perceptions research EBP is based on a critical analysis of both the management perceptions of the determinants of SR research and evaluation the impact of GRI efforts to increase SR in developing countries.FindingsTraining, legislation, issuing of guidance, stakeholder pressure, awareness campaigns, market and public pressure were identified as some of the determinants of SR. The evaluation of the impact of GRI efforts shows they had limited impact on increasing SR in developing countries. Research needed to adopt management perceptions research EBP is identified.Research limitations/implicationsThis study is conceptual. Management perceptions-based research is needed in more developing countries to better understand the determinants of SR and identify the most effective policies or practices to address related challenges.Originality/valueThe findings contribute to the calls to make academic research more relevant to policy formulation. In particular, the proposal for research needed to inform EBP adoption to address SR challenges in developing countries is new.

Servitization impact on performance moderated by country development

2019 ◽  
Vol 27 (1) ◽  
pp. 302-318 ◽  
Author(s):  
Renata Moreno ◽  
Leonardo Marques ◽  
Rebecca Arkader
Keyword(s):  
Developing Countries ◽  
Firm Performance ◽  
Social Impact ◽  
Developing Economies ◽  
Developed Countries ◽  
Content Type ◽  
Advanced Economies ◽  
Medium Level ◽  
And Performance ◽  
The Impact

Purpose In recent years, “servitization” has been studied extensively; however, as studies of the impact of servitization on firm performance offer mixed results, the conditions under which the relationship between servitization and performance becomes more significant are contested in the literature. These mixed results have led to the term “service paradox.” The paper aims to discuss these issues. Design/methodology/approach This study investigates servitization in the assembly industry based on a multi-country survey covering 539 industry plants in 22 countries. Findings The study contributes to the research on servitization by adding a contextual perspective to this relationship, taking into account level of development of the country in which a firm is located. Besides confirming the correlation between the servitization and performance, our study unveils a counter-intuitive result: a medium level of development of the country in which a firm is based corresponds to a stronger relationship between servitization and firm performance, whereas higher levels of development seem to diminish the increase in performance. Social implications This study balances out the focus in servitization on advanced economies and help to unveil its benefits in developing countries. Fostering servitization in developing economies can lead to social impact resulting from job shifts from manufacturing to service and the correlated implications for workers’ training and higher motivation experienced in service-based jobs. Originality/value Our study unpacks the “service paradox” and indicates that industry plants in developing countries can still harness the benefits of being first-movers, whereas, in developed countries, servitization may have become an order qualifier rather than a factor of differentiation.

Moderating effects on sustainability reporting and firm performance relationships: a meta-analytical review

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anupama Prashar
Keyword(s):  
Firm Performance ◽  
Meta Analysis ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Global Reporting Initiative ◽  
Content Type ◽  
Country Level ◽  
Subgroup Analyses ◽  
Quality Awards ◽  
Meta Regression

PurposeThe past sustainability literature on the effects of nonfinancial disclosures on a firm's performance is highly fragmented. Thus, the authors raise the following research questions to test potential differences: Is sustainability reporting (SR) based on the Global Reporting Initiative (GRI) or other systematic reporting framework associated with firm performance? Does quality or level of SR impact firm performance? Do firm-, industry- and country-level factors moderate the effect of SR on firm performance? Does the presence of publication bias affect this relationship?Design/methodology/approachMeta-analysis technique suggested by Hedges & Olkin (1985) was used to analyze a sample of 98 effect sizes reported in 60 studies published between 2010 and 2020 studying SR–performance associations. Meta-regression and subgroup analyses were used to investigate the moderating variables accounting for this heterogeneity in the relationship.FindingsResults reveal that level and quality of SR influence the market-, accounting- and operational-based measures of firm performance. Meta-regression results depict that for large, matured firms, or the ones with institutional investors as board members or the ones that actively participate SR quality awards, SR translates better into firm performance. Subgroup analyses demonstrate that the SR–firm performance relationship is moderated by the corporate governance (CG) system of the country and the firm's affiliation to environmentally sensitive industries.Originality/valueThese findings extend theoretical and practical understanding on effects of corporate sustainability communications on performance.

Sustainability reporting in the aviation industry: worldwide evidence

2018 ◽  
Vol 9 (4) ◽  
pp. 362-391 ◽  
Author(s):  
Abdullah S. Karaman ◽  
Merve Kilic ◽  
Ali Uyar
Keyword(s):  
Logistic Regression ◽  
Firm Performance ◽  
Sustainability Reporting ◽  
Aviation Industry ◽  
Content Type ◽  
Negatively Associated ◽  
Reporting Practices ◽  
Sustainability Disclosure ◽  
Wide Range ◽  
Sustainability Reports

Purpose The purpose of this study is to investigate empirically what affects Global Reporting Initiative (GRI)-based sustainability reporting and its relationship with firm performance in the aviation industry between 2006 and 2015. Design/methodology/approach The authors derived data from the GRI Sustainability Disclosure Database and Thomson Reuters EIKON; from the former, they downloaded GRI-based reports, and from the latter, they obtained financial data. The authors performed four-level analysis – report existence, report count, application level of report and firm performance –using various regression models (i.e. logistic regression, Poisson regression, ordered logistic regression and ordinary least squares regression). Findings First, the authors based the analysis on the existence of GRI-based sustainability reports, which showed that firm size and leverage are positively associated with sustainability reporting. Contrary to expectations, ownership was negatively associated. Furthermore, free cash flow per share, growth and profitability do not have significant effects on sustainability reporting, in contrast to expectations. Subsequent analysis was based on report count (number of total published reports within the examination period) and application levels of reports. Compared to the preceding analysis, there were no notable surprises. In addition, we found evidence that growth is negatively associated with application levels of reports (partially supported). Thus, report existence, report count and application level results largely confirm each other. Finally, the authors tested the effect of sustainability reporting on firm performance, which did not produce significant results. Thus, in the aviation industry, sustainability reporting does not play a significant role in enhancing firm performance. Practical implications First, the findings show that larger and highly leveraged aviation firms can reduce agency and legitimacy costs through sustainability reporting. Surprisingly, the same assumption did not hold for ownership structure as the firms with diffused ownership base tend not to publish sustainability reports. Thus, boards are advised to establish and improve monitoring mechanisms in these types of firms. Second, although the number of aviation companies publishing separate sustainability reports has increased significantly over the years, almost half of the companies are not still producing sustainability reports. Hence, if the aviation industry believes the merits of engaging in sustainability issues and sincerely desires to enhance its sustainability reporting practices, the authors can suggest the following initiatives. Boards might encourage companies to incorporate sustainability issues into company operations by assigning the necessary financial and human resources. The boards might also establish a separate sustainability committee or department, which could focus on sustainability issues and reporting practices. Regulatory bodies could also encourage aviation companies to act in a socially and environmentally responsible manner by proposing legal requirements and providing guidance. Social implications Relevant civil organisations and environmental activists might undertake more active roles to enhance awareness of sustainability issues in the aviation industry. Originality/value Most of the prior studies did not focus on standalone GRI-based sustainability reports, and they were conducted on limited samples and not the aviation industry in particular. This study aims to fill these gaps empirically by establishing testable hypotheses and attempting to demonstrate the validity of theoretical relationships in a wide range of data and among aviation companies worldwide. In this sense, this study is unique in what it undertakes. This study also tests whether sustainability reporting impacts firm value in the aviation industry which, to the best of the authors’ knowledge, has not been examined in prior studies to this extent.

The role of audit committee attributes in corporate sustainability reporting

2019 ◽  
Vol 21 (2) ◽  
pp. 249-264 ◽  
Author(s):  
Amina Buallay ◽  
Jasim Al-Ajmi
Keyword(s):  
Audit Committee ◽  
Corporate Sustainability ◽  
Sustainability Reporting ◽  
Audit Committees ◽  
Content Type ◽  
Disclosure Requirements ◽  
Sustainability Disclosure ◽  
Financial Expertise ◽  
The Impact

Purpose The purpose of this paper is to analyze the extent to which sustainability reporting by banks in the Gulf Cooperation Council (GCC) is affected by the attributes of audit committees. Design/methodology/approach The research is positivist and quantitative, based on a cross-sectional and time series analysis of 59 banks from 2013 to 2017. A multivariate model is used to investigate the impact of selected audit committee attributes (financial expertise, size, members’ independence and meeting frequency) on sustainability reporting. The model is built on agency, legitimacy, resources and stakeholders theories. Findings In contrast to the hypothesis, the authors report a negative association between financial expertise and sustainability reporting. Members’ independence and meeting frequency play a positive role in determining the extent of disclosure. The control variables (bank size, age and auditor type) are positively associated with corporate sustainability reporting. Research limitations/implications The main limitations of this study are related to the chosen attributes of audit committee and do not consider the board’s attributes. However, the authors believe these limitations do not affect the findings. Future research that includes more attributes when they became available will offer more insights into the role of audit committees on sustainability disclosure of financial institutions. Overcoming these limitations may make the results more generalizable. Practical implications The results of this study have important implications for regulators, bank management, investors and creditors. For regulators, in the countries of the GCC and in countries like them, the findings reveal the importance of disclosure requirements. The development of disclosure requirements is likely to improve corporate sustainability reporting and reduce variations in the extent of disclosure among banks. Banks could use these results to improve their reporting to outsiders. For creditors and investors, the study improves their awareness of the importance of corporate social responsibility, corporate governance and environmental information on credit and investment decisions and encourages banks to improve their disclosures of non-financial information. Originality/value This research makes a contribution to the scarce literature on sustainability reporting by banks, especially in an environment where capital markets lack active institutional investors, where regulators play the dominant role in determining the extent of disclosure and where banks are the main source of external finance for the corporate sector.

Corporate attributes affecting sustainability reporting: an Indian perspective

2017 ◽  
Vol 59 (3) ◽  
pp. 322-340 ◽  
Author(s):  
Aparna Bhatia ◽  
Siya Tuli
Keyword(s):  
Content Analysis ◽  
Oil And Gas ◽  
Empirical Studies ◽  
Sustainability Reporting ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Content Type ◽  
Advertising Intensity ◽  
Sustainability Disclosure ◽  
The Impact

Purpose This paper aims to examine the relationship between sustainability reporting by companies and selected corporate specific attributes. It also highlights that the scope of sustainability reporting differs from company to company and industry to industry. Design/methodology/approach Methodology is based on content analysis of 158 Indian companies selected from BSE 200. It uses multiple regression analysis to identify significant corporate attributes. Findings The analysis in this study reveals that companies with large size, older age, having multinational operations and belonging to Software, IT and ITES and Oil and Gas industry have significant sustainability disclosure. However, company’s profits, leverage, growth and advertising intensity are negatively related with the extent of sustainability disclosure. Other variables are found to be insignificant. Research limitations/implications As content analysis technique has been used for gathering sustainability information, subjective judgment involved in identifying and classifying the nature of reported sustainability information cannot be ruled out. Practical/implications This study adds to the growing literature on international sustainability disclosure practices and their determinants. Hence, it has its implications for a number of interested groups as investors, accounting bodies, regulatory authorities, companies, government, stock exchanges, general public, academicians and researchers. Originality/value As an emerging trend, there are few empirical studies exploring the determinants of sustainability reporting. To the best of the authors’ knowledge, this paper covers the impact of large number of corporate attributes in wholesome.

Sustainability reporting and bank performance after financial crisis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amina Buallay ◽  
Sayed M. Fadel ◽  
Jasim Alajmi ◽  
Shahrokh Saudagaran
Keyword(s):  
Developing Countries ◽  
Financial Crisis ◽  
Generalized Method Of Moments ◽  
Sustainability Reporting ◽  
Developed Countries ◽  
Bank Performance ◽  
Content Type ◽  
The 2008 Financial Crisis ◽  
The Impact ◽  
The Relationship

Purpose This study aims to examine the relationship between sustainability reporting and bank performance after financial crisis in developed and developing countries. Design/methodology/approach This study examines 882 banks from developed and developing countries covering 11 years after the 2008 financial crisis. The independent variable is environmental, social and governance (ESG) scores. The dependent variables are return on assets, return on equity and Tobin’s Q. This study uses bank- and country-specific control variables to measure the relationship between sustainability reporting and bank performance. Findings The findings deduced from the empirical results demonstrate that ESG improves banks’ accounting and market-based performance in developed countries, supporting value creation theory. Using pooling regression and instrumental variable – generalized method of moments, this study finds that ESG weakens banks’ performance in developed and developing countries. Originality/value To the best of the author’s knowledge, this is the first study to investigate and compare the impact of sustainability reporting on banks’ performance in developed and developing countries. The study found similarities in the impact of sustainability reporting and the improvement of banks’ current and future performance.

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