Are mandatory non‐financial disclosures credible? Evidence from Italian listed companies

Mazzotta, Romilda; Bronzetti, Giovanni; Veltri, Stefania

doi:10.1002/csr.1935

Cited by 50 publications

(52 citation statements)

References 59 publications

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“…Stronger dedication and commitment could be guaranteed by voluntary reporting practices, which confer more legitimacy on companies (Venturelli et al 2017;La Torre et al 2018). However, consensus has not yet been reached regarding mandatory or voluntary NFI reporting (Mazzotta et al 2020). Indeed, several drawbacks are associated with voluntary disclosure, such as lack of accuracy, neutrality, objectivity, and comparability (Hąbek and Wolniak 2016;Caputo et al 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

Assessing the Effects of Directive 2014/95/EU on Nonfinancial Information Reporting: Evidence from Italian and Spanish Listed Companies

Posadas

Tarquinio

2021

Administrative Sciences

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This paper explored the effects of new regulation on the disclosure of NFI in two European countries, Italy and Spain. The method used to develop the analysis is mainly qualitative. Content analysis was performed to verify the sustainability indicators disclosed by Italian and Spanish companies, listed on the FTSE MIB and IBEX 35 Indexes, before and after the Directive’s publication and implementation in national legislation. The level of NFI disclosure was scored using a disclosure index. The comparative analysis found a progressive reduction in disclosure levels for Italian companies compared with Spanish companies, for which an expansion of the disclosure was detected. Moreover, a reduced gap between the quantity of NFI reported in the two countries was found. This is one of the few studies to use a 3-year longitudinal analysis to investigate the EU Directive’s impact at the cross-country level.

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Section: Literature Reviewmentioning

confidence: 99%

Assessing the Effects of Directive 2014/95/EU on Nonfinancial Information Reporting: Evidence from Italian and Spanish Listed Companies

Posadas

Tarquinio

2021

Administrative Sciences

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“…This regulation represents a huge step forward in the accounting field and, more specifically, in sustainability reporting. The topic has such relevance that several research papers are looking at the impacts of the EU Directive on the disclosure practices of European companies (see among the others Krasodomska and Zarzycka 2020; Leopizzi et al 2019; Mazzotta et al 2020; Mio et al 2020; Muserra, Papa, and Grimaldi 2019; Sierra‐Garcia, Garcia‐Benau, and Bollas‐Araya 2018; Veltri et al 2020).…”

Section: Introductionmentioning

confidence: 99%

Carrot or stick? An empirical analysis of the different implementation strategies of the EU directive on nonfinancial information across Europe

Mio

Fasan

Marcon

et al. 2021

Corp Soc Responsibility Env

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The recent EU Directive on nonfinancial information (NFI) disclosure allows Member States some discretion regarding its implementation. More specifically, it allows countries to decide whether: (a) information assurance is compulsory; (b) companies can waive NFI disclosure because of possible competitive harms (safe harbor); and (c) fines can be imposed on companies not disclosing NFI. We empirically test the impact of different implementation strategies on NFI quantity and quality, and we find that regulations providing incentives ('carrots') are more effective than regulations imposing costs ('sticks'). More specifically, while mandatory assurance and safe harbor have a positive impact on NFI quantity, fines do not. Our results contribute to the literature on NFI disclosure and inform regulators on the effectiveness of different implementation strategies.

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“…A further path for future research relates to the link between corporate social responsibility and firm performance. In more detail, the requirement of social, environmental, and governance disclosures for large business enterprises (Silvestri and Veltri 2020;Mazzotta et al 2020), according to the Directive 2014/95/EU and the introduction of sustainability reports also for SMEs (Caputo et al 2017) represents new governance elements to be considered for a possible connection with firm performance.…”

Section: Discussionmentioning

confidence: 99%

The Relationship between Governance Quality and the Cost of Equity Capital in Italian Listed Firms: An Update

Bertoncelli

Fandella

Sironi

2021

JRFM

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This paper investigates the relationship between corporate governance quality and the cost of equity capital, intended as the discount rate the market applies to a firm’s expected future cash flows to evaluate the current share price. Using data from the Italian listed corporations in 2018, this paper combines several attributes like board independence, board size, the existence of the internal audit, and CEO duality incorporated in a corporate governance quality index. Our results do not provide evidence of a statistically significant relationship between the corporate governance score and the firm’s equity capital cost. A possible explanation is that in recent years a greater homogeneity, and a generalized increase in corporate governance quality standards, has been observed in the Italian framework with worse companies that closed the gap with those with higher performances. Hence, lower variability in the corporate governance index results in a not significant effect of a composite index on reducing the cost of equity capital.

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Are mandatory non‐financial disclosures credible? Evidence from Italian listed companies

Cited by 50 publications

References 59 publications

Assessing the Effects of Directive 2014/95/EU on Nonfinancial Information Reporting: Evidence from Italian and Spanish Listed Companies

Assessing the Effects of Directive 2014/95/EU on Nonfinancial Information Reporting: Evidence from Italian and Spanish Listed Companies

Carrot or stick? An empirical analysis of the different implementation strategies of the EU directive on nonfinancial information across Europe

The Relationship between Governance Quality and the Cost of Equity Capital in Italian Listed Firms: An Update

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