Abstract
Purpose
The purpose of this paper is to examine the impact of environmental, social, and governance (ESG) practices disclosure and firm value in the Egyptian context. This is done through investigating the influence of being listed and ranked in the Egyptian Corporate Responsibility Index on firm value during the period starting from 2007 to 2016.
Design/methodology/approach
Using univariate and multivariate analyses, the findings support the economic benefits of ESG disclosures.
Findings
The authors find that firms listed in the ESG index have higher firm value, and that there is a positive association between firms’ higher rankings in the index and firm value, as measured by Tobin’s q.
Research limitations/implications
The findings provide feedback to regulators and standard-setters in the developing countries, and more specifically the Egyptian regulators, on the benefits associated with the introduction of the sustainability index (Standard & Poor’s (S&P)/EGX ESG index). This, in turn, clarifies how the government’s efforts to promote ESG provide benefits to publicly traded firms.
Practical implications
By linking ESG to firm value, the ESG index will enable investors to take a leading role in inducing firms to enhance transparency and disclosure, and hence, improving their reporting standards. This, in turn, will ultimately result in improving sustainability and governance practices in Egypt.
Social implications
The reported positive market reactions to social and governance practices disclosures can motivate firms to improve their social and governance performance.
Originality/value
The study contributes to the literature by addressing the combined economic effects of social and governance disclosures on firm value, and by investigating the economic effects of such disclosures on firm value in an emerging market.
Subject
Sociology and Political Science,Development,Accounting
Reference77 articles.
1. Corporate environmental disclosure, financial markets and the media: an international perspective;Ecological Economics,2008
2. Environmental disclosure and stock market liquidity: evidence from Arab MENA emerging markets;Applied Economics,2016
3. Albuquerque, R.A., Durnev, A. and Koskinen, Y. (2015), “Corporate social responsibility and firm risk: theory and empirical evidence”, working paper, Boston University, Boston, MA.
4. The relations among environmental disclosure, environmental performance, and economic performance: a simultaneous equations approach;Accounting, Organizations and Society,2004
5. Corporate governance and firm value: international evidence;Journal of Empirical Finance,2011
Cited by
133 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献