Corporate ESG engagement and information asymmetry: the moderating role of country-level institutional differences

Bilyay-Erdogan, Seda

doi:10.1080/20430795.2022.2128710

Cited by 19 publications

(9 citation statements)

References 76 publications

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“…[31] found that high governance performance significantly impacted businesses' financial success, particularly through the mediating effect of customer loyalty and satisfaction. This was supported further by [10], who discovered that there is a greater link between governance investment and corporate financial performance in developing and least-developed countries compared to industrialized countries, suggesting that the effect of governance investment on business performance may vary depending on the kind of economic environment. Conversely, Cohen [32] also discovered an insignificant link between governance disclosure and firm profitability, suggesting that the impact of governance disclosure on business profitability varies according to the environment and sector.…”

Section: Empirical Review and Hypotheses Developmentmentioning

confidence: 83%

“…The principle of legitimacy requires businesses to demonstrate their actions that align with prevailing social norms. The theory prioritizes societal interests over organizational interests [10]. Companies may improve their ESG performance and satisfy societal sustainability expectations by embracing cutting-edge technology, which will boost their credibility and reputation [17].…”

Section: Legitimacy Theorymentioning

confidence: 99%

“…We used stakeholder and legitimacy theories to examine the impact of ESG performance on firm value. This is because the stakeholder theory helps in understanding how ESG performance affects the perceptions and relationships of various stakeholders, while the legitimacy theory explores how ESG performance affects the perceived legitimacy of a firm among stakeholders and how this legitimacy ultimately contributes to firm value [10]. By considering these theories, this study aims to analyze how ESG performance, stakeholder relationships, and legitimacy interact to influence firm value in the specific context of emerging economies.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

The Moderating Role of Technological Innovation on Environment, Social, and Governance (ESG) Performance and Firm Value: Evidence from Developing and Least-Developed Countries

Kong,

Agyemang,

Alessa

et al. 2023

Sustainability

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Recently, there has been growing recognition of the significance of environmental, social, and governance (ESG) factors in assessing a company’s performance and worth. Previous research has failed to take into account the significant impact of technological innovation in their empirical investigations. This study fills the gap by investigating the moderating impact of technological innovation on ESG performance and company value in developing and least-developed countries. The study utilized secondary data from 78 pharmaceutical companies from 2009 to 2022. For the investigation, we used the pooled mean group (PMG) and generalized methods of moments (GMM) estimators. The findings reveal that environmental and social performance influence firms’ value; however, governance performance does not influence firms’ value. Additionally, technological innovation acts as a catalyst, strengthening the favorable influence of ESG performance on firm value. The findings affirm the need to incorporate technological innovation, as it enables pharmaceutical firms to implement more efficient and sustainable practices.

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Section: Empirical Review and Hypotheses Developmentmentioning

confidence: 83%

Section: Legitimacy Theorymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The Moderating Role of Technological Innovation on Environment, Social, and Governance (ESG) Performance and Firm Value: Evidence from Developing and Least-Developed Countries

Kong,

Agyemang,

Alessa

et al. 2023

Sustainability

View full text Add to dashboard Cite

show abstract

“…This strong performance can send a positive signal to investors about the company's long-term value and stability [13] . The increasing interest of investors and consumers in ESG issues compels companies to disclose ESG-related information in their annual reports and other public documents, thereby reducing information asymmetry [76,77,78]. By incorporating ESG considerations, companies are better equipped to identify and manage potential risks related to environmental, social, and governance issues [79] .…”

Section: Theorymentioning

confidence: 99%

ESG and Leverage Adjustment: Based on Stakeholder Theory and Signaling Theory

Chen

2024

AEMPS

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Many of today's firms are suffering from leverage imbalance. A company's debt can negatively impact its performance when it deviates from its target leverage. Thus, this paper discusses adjusting the firm's capital structure to an optimal one. Combining stakeholder theory and signaling theory, this paper discusses how and under what circumstances ESG may have an impact on capital structure, from which the paper proposes the following conjectures: whether ESG can have a significant impact on a firm's target leverage; how ESG can affect a firm's capital structure when the firm has an asymmetry of information; and whether ESG can be tailored to economic environments that can have an impact on a firm's capital structure changes have an effect. After the inference of this paper, ESG can effectively influence firms' capital structure and accelerate the adjustment speed of firms' leverage to target leverage under the state of firms' information transparency. ESG will be more effective in regulating firms' target leverage in the downturn of the economic environment. The analytical framework of this paper may also be effectively applied to other research directions, such as corporate investment decisions, cash holdings, and dividend policies.

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“…Fourth, institutional theory is a frequently adopted framework in the literature on ESG, since disclosure of ESG plays an important role in portraying the reputation of corporate sustainability [56]. Therefore, institutional theory reflects the impact of social and environmental performance on corporate success [57]. Campbell notes that within the institutional theory paradigm, companies are perceived as economic units operating within such frameworks constructed by institutions with expectations [56].…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Investigating the Factors That Determine the ESG Disclosure Practices in Europe

2023

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The increased focus on environmental (E), social (S), and governance (G) (ESG) disclosure has become a necessary step toward the integration of sustainability practices into firms’ culture to meet the expectations of stakeholders. The social and environmental implications of firm activities on the environment and surrounding communities have led to the growing demand for useful non-financial information. This paper investigates the impacts of the board’s corporate social responsibility (CSR) strategy and CSR orientation, GRI, and the country–cultural dimensions, based on Hofstede’s measures of ESG disclosure practices within Europe. Using a European dataset from Bloomberg and Refinitiv Eikon, this paper adopts a quantitative research methodology to test the research hypotheses through a statistical analysis of 7840 observations from European companies to analyze the extent of the relationship between micro- and macro-variables and the disclosure of company ESG. Our findings suggest that both board CSR orientation and strategy and the GRI have positively and significantly affected the overall disclosure of ESG practices within Europe. When examining country–cultural dimensions, we find that individualism and feminine cultures are positively associated with increased levels of ESG disclosure. Our findings shed light on factors affecting ESG disclosure practices within Europe and could be of interest to companies, policy makers, and other stakeholders.

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Corporate ESG engagement and information asymmetry: the moderating role of country-level institutional differences

Cited by 19 publications

References 76 publications

The Moderating Role of Technological Innovation on Environment, Social, and Governance (ESG) Performance and Firm Value: Evidence from Developing and Least-Developed Countries

The Moderating Role of Technological Innovation on Environment, Social, and Governance (ESG) Performance and Firm Value: Evidence from Developing and Least-Developed Countries

ESG and Leverage Adjustment: Based on Stakeholder Theory and Signaling Theory

Investigating the Factors That Determine the ESG Disclosure Practices in Europe

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