Material Sustainability Information and Stock Price Informativeness

Grewal, Jyothika; Hauptmann, Clarissa; Serafeim, George

doi:10.1007/s10551-020-04451-2

Cited by 186 publications

(153 citation statements)

References 52 publications

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“…The results of the research of Cunha and Moneva (2018) indicate that compliance with sustainability becomes an instrument of responsibility for stakeholders, so the transparency and legitimization of their activities are the main factors that influence their publications. This finding aligns with that of Grewal et al (2020), who found that firms voluntarily disclosing more Sustainability Accounting Standards Board (SASB)-identified sustainability information exhibit greater price informativeness. Moreover, company legitimacy implies that companies modify their actions so that they are acceptable to the community and act in ways consistent with social values.…”

Section: Literature Reviewsupporting

confidence: 86%

Correlation between the DJSI Chile and the Financial Indices of Chilean Companies

Chahuán-Jiménez

2020

IJFS

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The Dow Jones Sustainability Index Chile (DJSI Chile) is made up of leading sustainability companies that are investing great effort into sustainable management. This study correlates the DJSI Chile with the financial indices (return on equity (ROE), return on assets (ROA), market value, earnings, and leverage) of companies that belong to the General Stock Price Index (IGPA) in Chile. The methodology used was quantitative, considering Chilean companies in the IGPA, including companies belonging to the DJSI Chile, applying a normality and correlation test based on the results. In conclusion, the study shows that in the results for the ROE, ROA, and leverage variables, there is no positive correlation with the DJSI Chile. However, the DJSI Chile is correlated with market value (for approximately 80% of the companies), and with earnings, there is a slightly higher correlation for the companies that belong to the DJSI Chile than for the remaining companies in the IGPA, thus if there exists a correlation between the DJSI Chile index and the variables market value and earnings, the index enables the prediction of those financial variables or predicts the finance indices (value market and earnings) of the companies that make up the DJSI Chile basing in the DJSI Chile index.

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Section: Literature Reviewsupporting

confidence: 86%

Correlation between the DJSI Chile and the Financial Indices of Chilean Companies

Chahuán-Jiménez

2020

IJFS

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“…Third, environmental, social, and corporate governance (ESG) data is manually collected from the Bloomberg. Bloomberg started to report the ESG scores since 2007 (Grewal, Hauptmann, and Serafeim, 2017). Finally, we collect firms' financial information and institutional ownership data from the Bloomberg that provides definitive source of company information for the UK firms.…”

Section: Data and Samplementioning

confidence: 99%

Board of directors network centrality and environmental, social and governance (ESG) performance

Harjoto

Wang

2020

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Purpose Drawing from social capital, social network theory of stakeholder influence and stakeholder management, the purpose of this paper is to examine the relationship between board network centrality and firms’ environmental, social and governance (ESG) performance. Design/methodology/approach Using social network analysis, the authors construct five board network centrality, namely, degree centrality (the number of connections), closeness centrality (distance among firms), eigenvector centrality (the quality of connections), betweenness centrality (how often a firm sits between two other firms) and the information centrality (the speed and reliability of information), as measures of board access for social capital and timely information. Findings Using a sample of non-financial firms listed in the UK FTSE 350 index from 2007 to 2018, the authors find that board networks, measured by degree, closeness, eigenvector, betweenness and information centrality, has positive influence on firms’ ESG performance. Furthermore, the findings show that there is a non-linear relationship between board networks and ESG performance, and this relationship is stronger in the sectors where firms that have high product market concentration and high percentage of women board members. Originality/value This study unveils that strong board network centrality brings higher social (reputational) capital and information advantages to the firm to effectively, timely and accurately deal with the pressures from stakeholders (stakeholder management), which leads to better ESG performance.

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“…Several studies link synchronicity to factors related to corporate transparency, such as Jin and Myers (), Haggard et al (), Hutton et al (), Gul et al (), Gul et al (), Bartram et al (), Armstrong et al (), Kim et al (), Li et al (), Peterson et al (), Piotroski et al (), Dong et al (), Grewal et al (), and Choi et al (). Other studies such as Bissessur and Hodgson (), Kim and Shi (), Wang and Yu (), and Barth et al () link changes in accounting standards to changes in synchronicity, while Piotroski and Roulstone (), Chan and Hameed (), Crawford et al (), Muslu et al (), and Wang () relate sell‐side analysts' research to the relative amount of firm‐specific information reflected in prices.…”

mentioning

confidence: 99%

Illiquidity and the Measurement of Stock Price Synchronicity

Gassen¹,

Skaife

Veenman

2020

Contemporary Accting Res

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This paper demonstrates that measures of stock price synchronicity based on market model R2s are predictably biased downward as a result of stock illiquidity, and that previously employed remedies to correct market model betas for measurement bias do not fix R2. Using a large international sample of firm‐years, we find strong negative and nonlinear relations between illiquidity and R2 across countries, across firms, and over time. Because variables of interest frequently relate to illiquidity as well, we illustrate the consequences of not controlling for illiquidity in synchronicity research. More generally, we demonstrate the importance of using nonlinear control variable methods. Overall, we conclude that the illiquidity‐driven measurement bias in R2 provides an explanation for why prior research finds low‐R2 firms to have weak information environments, and suggest future research carefully evaluate the sensitivity of its results to nonlinear controls for illiquidity.

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Material Sustainability Information and Stock Price Informativeness

Cited by 186 publications

References 52 publications

Correlation between the DJSI Chile and the Financial Indices of Chilean Companies

Correlation between the DJSI Chile and the Financial Indices of Chilean Companies

Board of directors network centrality and environmental, social and governance (ESG) performance

Illiquidity and the Measurement of Stock Price Synchronicity

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