TY - JOUR
T1 - The impact of environmental, social, and governance disclosure on firm value
T2 - the role of CEO power
AU - Li, Yiwei
AU - Gong, Mengfeng
AU - Zhang, Xiu Ye
AU - Koh, Lenny
PY - 2018/1/1
Y1 - 2018/1/1
N2 - Using a large cross-sectional dataset comprising of FTSE 350 listed firms, this study investigates whether superior environmental, social and corporate governance (ESG) disclosure affects firm value. We find a positive association between ESG disclosure level and firm value, suggesting that improved transparency and accountability and enhanced stakeholder trust play a role in boosting firm value. We also report that higher CEO power enhances the ESG disclosure effect on firm value, indicating that stakeholders associate ESG disclosure from firms with higher CEO power with greater commitment to ESG practice. This evidence is strong and consistent for three different measures of ESG-related disclosure: the ESG, environmental and social disclosure scores. The results are robust to the use of an instrumental variable approach, and the Heckman two-stage estimation procedure.
AB - Using a large cross-sectional dataset comprising of FTSE 350 listed firms, this study investigates whether superior environmental, social and corporate governance (ESG) disclosure affects firm value. We find a positive association between ESG disclosure level and firm value, suggesting that improved transparency and accountability and enhanced stakeholder trust play a role in boosting firm value. We also report that higher CEO power enhances the ESG disclosure effect on firm value, indicating that stakeholders associate ESG disclosure from firms with higher CEO power with greater commitment to ESG practice. This evidence is strong and consistent for three different measures of ESG-related disclosure: the ESG, environmental and social disclosure scores. The results are robust to the use of an instrumental variable approach, and the Heckman two-stage estimation procedure.
UR - http://www.scopus.com/inward/record.url?scp=85031818702&partnerID=8YFLogxK
UR - http://eprints.whiterose.ac.uk/141958/
U2 - 10.1016/j.bar.2017.09.007
DO - 10.1016/j.bar.2017.09.007
M3 - Article
AN - SCOPUS:85031818702
SN - 0890-8389
VL - 50
SP - 60
EP - 75
JO - British Accounting Review
JF - British Accounting Review
IS - 1
ER -