Do institutional investors encourage firm to social disclosure? The stakeholder salience perspective

Aluchna, Maria; Roszkowska-Menkes, Maria; Kamiński, Bogumił; Bosek-Rak, Dominika

doi:10.1016/j.jbusres.2021.12.064

Cited by 71 publications

(58 citation statements)

References 47 publications

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“…Corporate goals such as maximizing shareholder value are achieved by considering the interests of stakeholders, and it is necessary to meet stakeholders' demands. Moreover, short-sighted behavior that overemphasizes shareholder primacy and ignores stakeholders' interests can harm enterprises' efficient and effective operations, board decision-making is beneficial to the enterprise in the short term, but it often sacrifices long-term value (Aluchna et al, 2022). On the other hand, Stakeholders have positive beliefs in the enterprise with good ESG performance, which positively influences their corporate value.…”

Section: Basic Hypothesismentioning

confidence: 99%

“…Niu et al (2013) argue that institutional investor ownership will negatively affect enterprises' voluntary disclosure, and voluntary ESG information disclosure may have a negative effect on the relationship between ESG performance and corporate value. Risk-averse institutional investors don't encourage enterprises to increase the cost of information disclosures, and the improvement of ESG performance is regarded as risk management, rather than a way of increasing corporate value (Aluchna et al, 2022). Therefore, referring to the data of China Research Data Service Platform (CNRDS), we use the proportion of the shares held by institutional investors in the outstanding A shares to measure institutional investor ownership, which is divided into high and low.…”

Section: Heterogeneity Analysis Of Pollution Degreementioning

confidence: 99%

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ESG performance and corporate value: Analysis from the stakeholders’ perspective

Zheng

Wang

Sun

et al. 2022

Front. Environ. Sci.

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Based on the panel data of China’s A-share non-financial listed enterprises from 2011 to 2020, we empirically explore whether EGS performance can significantly promote corporate value and how to promote it, from the stakeholders’ perspective. We find that: 1) ESG performance significantly improves corporate value. 2) Both media attention and analyst coverage play an intermediary role in the impact of ESG performance on corporate value. 3) Further analysis of the single dimension of ESG illustrates that Environmental (E) and Social (S) have a positive impact on corporate value, but the effect size of Social (S) is smaller, and there is no evidence for a significant relationship between Governance (G) and corporate value. 4) The heterogeneity analysis shows that ESG performance of non-heavily polluting enterprises has a significant positive effect on corporate value, but not on heavily polluting enterprises. Meanwhile, ESG performance of enterprises with a low percentage of institutional investor ownership has a significant positive effect on corporate value, but not with a high percentage. Overall, our study shows that high-quality ESG performance triggers the attention of media and analysts, which in turn promotes corporate value by raising stakeholder pressure. We also analyze the possible causes of heterogeneous results from the perspective of stakeholders, and put forward reasonable suggestions to promote ESG performance and corporate value, as well as protect the interests of stakeholders.

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Section: Basic Hypothesismentioning

confidence: 99%

Section: Heterogeneity Analysis Of Pollution Degreementioning

confidence: 99%

ESG performance and corporate value: Analysis from the stakeholders’ perspective

Zheng

Wang

Sun

et al. 2022

Front. Environ. Sci.

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“…This indicates that PRI funds cannot induce ESG improvements in portfolio firms. Aluchna et al (2022) found a negative association between mutual funds ownership and social performance disclosure, showing that ESG disclosure is not in the prime interest of mutual fund investors as they do not view social stakeholders as core constituencies.…”

Section: Introductionmentioning

confidence: 95%

Influence of distracted mutual fund investors on corporate ESG decoupling: evidence from China

Liu

Meng

2023

SAMPJ

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Purpose This study aims to explore whether investors’ inattention is associated with firms’ environmental, social and governance (ESG) decoupling, which is defined as the misalignment between the implementation and incorporation of ESG policies. Design/methodology/approach Focusing on a sample of the components of ESG ratings for China Securities Index (CSI) 300 companies between 2017 and 2019, the authors test the relationship between firms’ ESG decoupling level and mutual fund investors’ distraction by applying exogenous shocks to their portfolios. Findings The results show that firms with distracted mutual fund investors engage in more external than internal ESG actions, leading to a high ESG decoupling level. Mutual fund investors use “threat of exit” rather than “voice” as a governance mechanism to influence corporate ESG decoupling. While external ESG actions mitigate stock price crash risk, internal ESG actions increase firm value; firms with a high ESG decoupling level suffer lower valuations. Practical implications This study has implications for increasing the congruence between firms’ external and internal ESG actions, thereby improving firms’ ESG performance and long-term economic outcomes. Social implications This paper helps policy-makers and regulators to reassess how ESG policies can be implemented to be consistent with organizations’ core business activities. Originality/value Contributing to prior studies of greenwashing and corporate social responsibility decoupling, this paper extends decoupling literature by revisiting ESG impacts in an integrated framework and explores the antecedents of corporate ESG decoupling from the perspective of institutional investor monitoring.

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“…Fourth, future research could extend our approach by evaluating how the differences in stakeholder salience (Mitchel et al , 1997) trigger different legitimacy judgments for MNEs and how MNEs’ responses to such pressures differ. Shifting the attention to stakeholders’ salience could advance our research by providing a fine-grained understanding of the relationship between the relevance of the stakeholders and the content of the CG-related information MNEs disclose (Aluchna et al , 2022).…”

Section: Limitations and Future Researchmentioning

confidence: 99%

MNEs’ corporate governance disclosure: a strategic response to corrupt environments

Juliao‐Rossi

Losada-Otálora

Católico-Segura

2022

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Purpose This study aims to examine how corruption influences the voluntary disclosure of corporate governance (CG)-related information by developed country multinationals (DC-MNEs) and emerging market multinationals (EM-MNEs) investing in six Latin American countries. Design/methodology/approach The study uses information from 300 MNEs included in the 2018 ranking of the 500 Largest Latin American companies (America Economía, 2018). Each MNE’s final annual report for the financial year ending 2018 was examined and coded to obtain the corporate governance disclosure index. Fractional probit regression was applied to test the hypotheses of the research. Findings DC-MNEs disclose more CG-related information in corrupt environments than EM-MNEs. This differentiated behavior occurs because DC-MNEs face higher legitimacy pressures in corrupt environments than EM-MNEs and because EM-MNEs are more experienced than DC-MNEs in dealing with such corrupt environments. Practical implications While both EM-MNEs and DC-MNEs need to continue investing in corrupt countries to grow, they need to disclose CG-related information as a strategic tool to manage the legitimacy issues triggered by corruption in the markets they operate. Originality/value Despite corruption being pervasive in emerging markets, its implications for firms’ strategic behaviors are still under-researched. This paper extends the scope of corporate governance and international business fields by studying how MNEs respond to relevant dimensions of the macro environment. This research shows that voluntary disclosure of CG-related information is a strategic response of the MNEs to gain legitimacy in corrupt environments.

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Do institutional investors encourage firm to social disclosure? The stakeholder salience perspective

Cited by 71 publications

References 47 publications

ESG performance and corporate value: Analysis from the stakeholders’ perspective

ESG performance and corporate value: Analysis from the stakeholders’ perspective

Influence of distracted mutual fund investors on corporate ESG decoupling: evidence from China

MNEs’ corporate governance disclosure: a strategic response to corrupt environments

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