scholarly journals Materiality of Disclosure of Non-financial Sustainability Information and Company Financial Performance: Evidence from Australian Listed Companies

2021 ◽  
Vol 8 (2) ◽  
pp. 199-214
Author(s):  
Ashraf Al Mamun
Keyword(s):  
Financial Performance ◽  
Fixed Effects ◽  
Research Training ◽  
Negative Relationship ◽  
Sustainability Reporting ◽  
Listed Companies ◽  
Financial Sustainability ◽  
Firm Level ◽  
Regulatory Policies ◽  
Sustainability Disclosure

The broad objective of this paper is to investigate the relationships between the disclosure of non-financial material sustainability information and the financial performance of listed Australian companies in the materials sector. Using firm-level fixed-effects analysis for all companies, the findings show a mixed relationship (no relationship or statistically significant negative relationship) between lagged aggregate non-financial material sustainability disclosure and financial performance of Australian listed companies in the materials sector. The present study contributes to the existing literature on disclosure of non-financial sustainability information by adding insights into the materiality concept of non-financial sustainability disclosure in the Australian context. The evidence from the current study is expected to provide useful information for the companies’ stakeholders in Australia who use both financial and non-financial information for formulating business and regulatory policies and for decisions regarding the persistent expansion of sustainability reporting requirements.   Funding Acknowledgement: This study is funded by the “Australian Government Research Training Program (RTP) Scholarship”.

Does Eco-Certification Correlate with Improved Financial Performance? Evidence From a Longitudinal Study in the US Hospital Industry

2021 ◽  
pp. 002073142110189
Author(s):  
Germán M. Izón ◽  
Nathaniel Islip
Keyword(s):  
Financial Performance ◽  
Fixed Effects ◽  
Negative Relationship ◽  
Cost Savings ◽  
The United States ◽  
Fixed Effects Model ◽  
Sustainable Practices ◽  
Production Externalities ◽  
Energy Star ◽  
Operating Margin

Health care-based negative production externalities, such as greenhouse gas emissions, underscore the need for hospitals to implement sustainable practices. Eco-certification has been adopted by a number of providers in an attempt, for instance, to curb energy consumption. While these strategies have been evaluated with respect to cost savings, their implications pertaining to hospitals’ financial viability remain unknown. We specify a fixed-effects model to estimate the correlation between Energy Star certification and 3 different hospitals’ financial performance measures (net patient revenue, operating expenses, and operating margin) in the United States between 2000 and 2016. The Energy Star participation indicators’ parameters imply that this type of eco-certification is associated with lower net patient revenue and lower operating expenses. However, the estimated negative relationship between eco-certification and operating margin suggests that the savings in operating expenses are not enough for a hospital to achieve higher margins. These findings may indicate that undertaking sustainable practices is partially related to intangible benefits such as community reputation and highlight the importance of government policies to financially support hospitals’ investments in green practices.

Lending relationships, credit ratings and bank loan spreads: evidence from Indonesian listed companies

2020 ◽  
Vol 16 (4) ◽  
pp. 455-479
Author(s):  
Yane Chandera ◽  
Lukas Setia-Atmaja
Keyword(s):  
Fixed Effects ◽  
Credit Ratings ◽  
Listed Companies ◽  
Bank Loan ◽  
Least Squares Regression ◽  
Firm Level ◽  
Content Type ◽  
Lending Relationships ◽  
Loan Spreads ◽  
The Impact

PurposeThis study examines the impact of firm-bank relationships on bank loan spreads and the mitigating role of firm credit ratings on that impact.Design/methodology/approachThe study sample consists of Indonesian publicly listed companies for the period 2006 to 2016; bank-loan data was extracted from the Loan Pricing Corporation Dealscan database. For the degree of firm-bank relationships, the data on each loan is manually computed, using five different methods taken from Bharath et al. (2011) and Fields et al. (2012). All of the regression analyses are controlled for the year fixed effects, heteroscedasticity, and firm-level clustering. To address the endogeneity issues, this study uses several methods, including partitioning the sample, running nearest-neighbour and propensity score matching tests, and using instrumental variables in two-staged least-squares regression models.FindingsIn line with relationship theory and in opposition to the hold-up argument, this study finds that lending relationships reduce bank loan spreads and that the impact is more noticeable among non-rated Indonesian firms. Specifically, each additional unit in the total number of years of a firm-bank relationship and the number of previous loan contracts with the same bank are associated with 7.34 and 9.15 basis-point decreases, respectively, in these loan spreads.Practical implicationsCorporations and banks should maintain close, long-term relationships to reduce the screening and monitoring costs of borrowing. Regulators should create public policies that encourage banks to put more emphasis on relationships in their lending practices, especially in relation to crisis-prone companies.Originality/valueTo the best of the authors’ knowledge, this is the first study to examine the impact of lending relationships on bank loan spreads in Indonesia. The study offers insights on banking relationships in emerging markets with concentrated banking industries, underdeveloped capital markets and prominent business-group affiliations.

scholarly journals Board Governance and Sustainability Disclosure: A Cross-Sectional Study of Singapore-Listed Companies

2018 ◽  
Vol 10 (7) ◽  
pp. 2578 ◽  
Author(s):  
Meibo Hu ◽  
Lawrence Loh
Keyword(s):  
Sustainability Reporting ◽  
Listed Companies ◽  
Cross Sectional Study ◽  
Board Independence ◽  
Board Governance ◽  
Executive Directors ◽  
Cross Sectional ◽  
Policy Makers ◽  
Sustainability Disclosure ◽  
The Relationship

This paper aims to investigate the relationship between board governance and sustainability disclosure in Singapore. Regression analysis is performed using cross-sectional data of Singapore-listed companies to examine the relationship between sustainability disclosure and various board governance factors, including board capacity, board independence, and board incentive. The findings show the presence of significant associations between board governance and sustainability disclosure. In terms of board capacity, companies with larger board sizes and a higher number of board meetings are more likely to practice sustainability reporting, and their reporting qualities are higher. For board independence, the percentage of independent directors positively impacts the firm’s reporting probability and quality on sustainability in Singapore. For board incentives, the practice of long-term incentives for executive directors can significantly improve both the probability and quality of sustainability reporting. The study adds to the literature on corporate governance and sustainability disclosure. It provides empirical evidence and guidance for firms and policy-makers in Singapore and beyond on how sustainability disclosure can be improved through robust board governance.

scholarly journals Determinants of Profitability in the Banking Sector: An Analysis of Post-Soviet Countries

Economies ◽  
2018 ◽  
Vol 6 (3) ◽  
pp. 41 ◽  
Author(s):  
Serhat Yüksel ◽  
Shahriyar Mukhtarov ◽  
Elvin Mammadov ◽  
Mustafa Özsarı
Keyword(s):  
Economic Growth ◽  
Financial Performance ◽  
Credit Card ◽  
Fixed Effects ◽  
Banking Sector ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Annual Data ◽  
Bank Profitability ◽  
Interest Income

The purpose of this paper is to identify the determinants of bank profitability in 13 post-Soviet countries. Within this scope, annual data between 1996 and 2016 is analyzed by using fixed effects panel regression and the Generalized Method of Moments (GMM). It is concluded that loan amount, non-interest income and economic growth are significant indicators of profitability. Moreover, the 2008 global mortgage crisis has a negative influence on bank profitability in post-Soviet countries. According to the estimation results, there is a positive relationship between non-interest income and economic growth with profitability. This result shows that when non-interest income of the banks increases, such as credit card fees and commission, it affects the financial performance of the banks, positively, and contributes to bank profitability. Another result of this study is that economic growth positively influences bank profitability. This result allows us to conclude that higher GDP comes with higher bank profitability for post-Soviet countries. Lastly, there is a negative relationship between loan-to-GDP ratio and profitability of the banks in post-Soviet countries. This means that when the ratio of total loans to GDP increases, it affects financial performance of the banks in a negative way. While considering this result, it is recommended that banks in post-Soviet countries should focus on ways to increase their non-interest income. Additionally, it is also significant for these banks to be careful and risk averse when lending to their customers.

scholarly journals Influence of Local Versus Foreign Corporations, as Shareholders, on Financial Performance of Romanian Listed Companies

2018 ◽  
Vol 11 (1) ◽  
pp. 97-116
Author(s):  
Alina Țaran ◽  
Marilena Mironiuc
Keyword(s):  
Financial Performance ◽  
Fixed Effects ◽  
Listed Companies ◽  
Individual Investors ◽  
Foreign Companies ◽  
Governmental Agencies ◽  
Fixed Effects Panel Regression ◽  
Expected Benefits ◽  
Foreign Corporations ◽  
Local Companies

AbstractIn the actual context of global mobility of investors and capitals, diverse categories of local and foreign shareholders (institutional investors, governmental agencies, corporations or individual investors) influence business activities, management and results of the owned entities. Shareholders’ monitoring ability is related to their interests and their involvement in the investee’s business. This study contributes to the on-going debate referring to local and foreign shareholders and investigates the influence of both local and foreign corporate shareholders on financial performance of Romanian listed companies during 1997-2016. Results of fixed-effects panel regression analysis reveal that local corporations positively influence the profitability of their affiliates, as measured by ROE. However, foreign corporate shareholders do not significantly influence financial performance of Romanian entities. Thus, the expected benefits associated with foreign ownership do not enhance the performance of local companies. These findings helps future privatisation or investment decisions in Romanian listed companies. Moreover, the results raise further questions regarding the interests of foreign companies investing in Romanian stock market.

Do Environmental, Social and Governance (ESG) Disclosures Affect Islamic Banks Financial

2021 ◽  
Vol 12 (1) ◽  
pp. 89-89
Author(s):  
Syaza Laili Sharipuddin ◽  
Nur Aeisya Firrzana Mohd Ayub ◽  
Nur Aqilla Mahassan ◽  
Memiyanty Abdul Rahim
Keyword(s):  
Financial Performance ◽  
Sustainability Reporting ◽  
Islamic Banks ◽  
Corporate World ◽  
Muslim Countries ◽  
Sustainability Disclosure ◽  
Sustainability Practices ◽  
Conventional Banks ◽  
Adoption Level ◽  
High Degree

Currently, businesses are very vulnerable and exposed to the uncertainty that may cause damage to the company. With the ongoing pandemic issue, companies are more concerned about their performance and survival. Companies like banks play a crucial role in the economy since its growth depends on its financial sector's stability regardless of the country. Thus, companies have many approaches and strategies to maintain their business and stay relevant in the corporate world; hence, ESG disclosure comes in handy. According to the Bursa Malaysia Sustainability Reporting Guide (2018), ESG which stands for "Environmental, Social, and Governance" is a term used extensively, specifically by the investment community, portraying the environmental, social, and governance matters considered by investors in the corporate behaviour context. Experts have actively discussed ESG disclosure to address such reporting to enhance the company's performance portfolio. Furthermore, the ESG factor becomes one of the primary considerations for the investors' decision. ESG factor influences and strengthens the investors' confidence towards the company's performance. Bukhari, Hashim and Amran (2020) suggested that companies providing ESG disclosure show improvement in their financial performance. Experts found a significant impact of sustainability practices on the Islamic banks' financial performance (Jan, Marimuthu & Isa, 2019). Companies' ESG disclosure performance has established a reputation for playing a significant role in financial transparency and how it varies by economic and stakeholder's perspective (Oncioiu, Popescu, Aviana, Serban, Rotaru, Petrescu & Pantelescu, 2020). Jan et al. (2019) found that there is still a low adoption level of sustainability practices and reporting in the Islamic banking industry. An empirical study conducted by Nobanee and Ellili (2016) also stated that sustainability disclosure has an insignificant effect on Islamic banks than the high degree of such disclosure on conventional banks. Moreover, from a study conducted in seven Muslim countries, the sustainability practices and reporting were not of serious concern to those countries' Islamic banks (Hassan and Syafri Harahap, 2010). Keywords: Environment, Social, Governance (ESG) Disclosure, Islamic Banks, and Financial Performance.

scholarly journals KPIs Reporting and Financial Performance in the Transition to Mandatory Disclosure: The Case of Italy

2020 ◽  
Vol 12 (12) ◽  
pp. 5195 ◽  
Author(s):  
Salvatore Loprevite ◽  
Domenico Raucci ◽  
Daniela Rupo
Keyword(s):  
Financial Performance ◽  
Sustainability Reporting ◽  
Global Reporting Initiative ◽  
Data Envelopment ◽  
Financial Indicators ◽  
Tobit Regression ◽  
Early Adoption ◽  
Sustainability Disclosure ◽  
The Relationship ◽  
Tobit Regression Model

European companies of public interest requested to comply with the Directive 2014/95/EU on Non-Financial Information (NFI) are allowed to fulfil the regulatory obligation following the Global Reporting Initiative (GRI) guidelines, which constitute at present the most widely spread framework for sustainability reporting. Given such prevalence, this paper examines the level of disclosure on Key Performance Indicators (KPIs) and its relationship with financial performance over the period 2016–2018 for Italian-listed companies adopting GRI guidelines to convey NFI under the Decree 254/2016. The research applies content analysis of the annual and sustainability reports to measure the disclosure index on KPIs, and Data Envelopment Analysis (DEA) to estimate the financial performance. A Tobit-regression model explores the nexus between financial performance and companies’ disclosure. Findings show a decrease in the disclosure levels in the early adoption of mandatory NFI and a significant association with the financial performance of the sampled companies. The study, assuming a comprehensive view of the financial indicators, improves our knowledge of the relationship between sustainability disclosure and financial performance and adds to the literature on the evolution of NFI in the transition from voluntary to mandatory regime.

scholarly journals Sustainability Reporting Practices In Indian Mining Companies

2015 ◽  
Vol 10 (2) ◽  
pp. 641-655 ◽  
Author(s):  
Daizy Daizy ◽  
Niladri Das
Keyword(s):  
Financial Performance ◽  
Negative Impact ◽  
Sustainability Reporting ◽  
Global Reporting Initiative ◽  
Jones Index ◽  
Reporting Practices ◽  
Mining Companies ◽  
Sustainability Disclosure ◽  
The World ◽  
Different Types

Nowadays sustainability reporting can be used for communication purpose in marketing and to show transparency of the company (Kolk, 2000). These types of reports published by organization to disclosed more information on non-financial performance. These report highlighted the company’s commitment towards stakeholders. Various industries throughout the world started disclosing non-financial performance (sustainability reporting) by using various different types of frameworks like Dow Jones index or global Reporting Initiative. In the 21st century sustainability reporting becomes important but in India it’s still in nascent stage. Out of all industries mining should be disclose information on the non-financial performance because of put direct negative impact on society and environment. Moreover mining is considered as one of the most polluting industries in the world. The objective of this paper is to examine and compare the level of sustainability reporting of sample private mining companies and sample public mining companies as GRI framework. It involves an explorative research design to understand the trend and variation in the quality and extent of sustainability disclosure information by top 100 Indian mining companies.

CSR and tax aggressiveness of Malaysian listed companies: evidence from an emerging economy

2019 ◽  
Vol 16 (5) ◽  
pp. 597-612 ◽  
Author(s):  
Nirmala Devi Mohanadas ◽  
Abdullah Sallehhuddin Abdullah Salim ◽  
Lim Kwee Pheng
Keyword(s):  
Fixed Effects ◽  
Negative Relationship ◽  
Listed Companies ◽  
Emerging Economy ◽  
Least Square ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Content Type ◽  
Tax Aggressiveness ◽  
Fixed Effects Panel Regression

Purpose This study aims to examine how corporate social responsibility (CSR) performance and corporate tax aggressiveness relate in Malaysia, an emerging economy in Southeast Asia. It also seeks to analyse how CSR performance in community, environment, marketplace and workplace themes relate to the tax aggressiveness of listed companies in this country. Design/methodology/approach This study analyses 182 companies listed in the Main Market of Bursa Malaysia from 2010 to 2012 using fixed-effects panel regression and ordinary least square regression. It uses current effective tax rate as a proxy for corporate tax aggressiveness and measures CSR performance using specially developed CSR performance disclosure index. Findings This study finds no statistical support that CSR performance is related to corporate tax aggressiveness in Malaysia. Similarly, there are no statistically significant relationships between environment-related and marketplace-related CSR performance and corporate tax aggressiveness. Nevertheless, community-related CSR performance has significant negative relationship with corporate tax aggressiveness. Workplace-related CSR performance meanwhile has significant positive relationship with corporate tax aggressiveness. Originality/value This study expands the current literature's focus on developed economies by examining the relationship between CSR and corporate tax aggressiveness in the setting of an emerging Asian economy, i.e. Malaysia. It is also the first empirical study focussing on this relationship among Malaysian listed companies.

ENVIRONMENTAL AND SOCIAL PERFORMANCE DISCLOSURE AND SHAREHOLDERS’ WEALTH- A PERSPECTIVE FROM MALAYSIAN COMPANIES

2012 ◽  
Vol 01 (12) ◽  
pp. 33-41
Author(s):  
Amir Khaveh ◽  
Seyed Rajab Nikhashemi ◽  
Abdolaziz Yousefi ◽  
Ahasanul Haque
Keyword(s):  
Social Performance ◽  
Sustainability Reporting ◽  
Listed Companies ◽  
Sustainable Growth ◽  
Share Price ◽  
Csr Reporting ◽  
Sustainability Disclosure ◽  
Wide Range ◽  
Net Profit ◽  
Csr Disclosure

Since sustainability reporting is a mean to communicate with a wide range of internal and external stakeholders and also reflect the companies’ sustainability performance, which inspires sustainable growth and development, consequently increasingly more and more stakeholders including shareholders ask for sustainability disclosures. In some Countries CSR reporting has become mandatory by legislation and companies have to disclose their environmental and social activities. Sustainability reporting has become mandatory for Malaysian public listed companies (PLC) since 2007. There a declarative about CSR activities in all Malaysian companies but number of sustainability indicators and the quality of disclosure are different among different companies. Since the main goal of each business is to maximize its shareholders’ wealth, and CSR practices would occur costs for companies, this paper amis to find any significant relationship between level of CSR disclosure and companies share price and net profit. The result. The paper studied through 45 Malaysian public listed companies in three years (From 2008-2010). The results indicated that companies with higher level of sustainability disclosure have higher share price and have higher net profit.

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