An Empirical Study on the Impact of Sustainability Reporting on Firm Value

Value relevance is an attractive exploratory topic for firms due to its influence on a firm’s competitiveness. Investigating potential factors that have an impact on firm value can provide management with the insights in how to enhance value. The aim of this paper is to explore the association betw...

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Main Author: Thi Thuc Doan Nguyen
Format: Article
Language:English
Published: Tomas Bata University in Zlín 2020-09-01
Series:Journal of Competitiveness
Subjects:
Online Access:https://www.cjournal.cz/index.php?hid=clanek&bid=archiv&cid=378&cp=
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spelling doaj-f92f5cced3154b9c9970dfbfe95009802020-11-25T04:02:10ZengTomas Bata University in ZlínJournal of Competitiveness1804-171X1804-17282020-09-0112311913510.7441/joc.2020.03.07An Empirical Study on the Impact of Sustainability Reporting on Firm ValueThi Thuc Doan Nguyen0https://orcid.org/0000-0003-4758-849XTomas Bata University in Zlín, Faculty of Management and Economics Value relevance is an attractive exploratory topic for firms due to its influence on a firm’s competitiveness. Investigating potential factors that have an impact on firm value can provide management with the insights in how to enhance value. The aim of this paper is to explore the association between sustainability reporting and firm value to gain an awareness of the value relevance of sustainability disclosures. The study concentrates on large listed German firms as research objects to reduce the influence of firm size, legislation and geographic differences. Moreover, instead of observing diverse sustainability reporting guidelines in one research, this paper focuses on the current most popular guidance, the Global Reporting Initiative (GRI). With this focus, it is more likely to achieve a relevant comparability among the firms’ sustainability reporting. This concentration also leads to the main research question of whether large listed German firms which have a higher adherent level to GRI guidance tend to have greater firm value. The research applies Multiple Regression to test the above relationship by involving 485 observations from 97 large listed German firms within the research period from 2013 to 2017. Along with the main model, a robustness test was performed to explore the connection in the context of a four-month period after the year-end deadline to issue sustainability reports in accordance with German Law. The findings indicate a significant negative relation between firm value and a firm’s GRI adherent level of sustainability reporting.https://www.cjournal.cz/index.php?hid=clanek&bid=archiv&cid=378&cp=gri adherent statusfirm valuesustainability reporting
collection DOAJ
language English
format Article
sources DOAJ
author Thi Thuc Doan Nguyen
spellingShingle Thi Thuc Doan Nguyen
An Empirical Study on the Impact of Sustainability Reporting on Firm Value
Journal of Competitiveness
gri adherent status
firm value
sustainability reporting
author_facet Thi Thuc Doan Nguyen
author_sort Thi Thuc Doan Nguyen
title An Empirical Study on the Impact of Sustainability Reporting on Firm Value
title_short An Empirical Study on the Impact of Sustainability Reporting on Firm Value
title_full An Empirical Study on the Impact of Sustainability Reporting on Firm Value
title_fullStr An Empirical Study on the Impact of Sustainability Reporting on Firm Value
title_full_unstemmed An Empirical Study on the Impact of Sustainability Reporting on Firm Value
title_sort empirical study on the impact of sustainability reporting on firm value
publisher Tomas Bata University in Zlín
series Journal of Competitiveness
issn 1804-171X
1804-1728
publishDate 2020-09-01
description Value relevance is an attractive exploratory topic for firms due to its influence on a firm’s competitiveness. Investigating potential factors that have an impact on firm value can provide management with the insights in how to enhance value. The aim of this paper is to explore the association between sustainability reporting and firm value to gain an awareness of the value relevance of sustainability disclosures. The study concentrates on large listed German firms as research objects to reduce the influence of firm size, legislation and geographic differences. Moreover, instead of observing diverse sustainability reporting guidelines in one research, this paper focuses on the current most popular guidance, the Global Reporting Initiative (GRI). With this focus, it is more likely to achieve a relevant comparability among the firms’ sustainability reporting. This concentration also leads to the main research question of whether large listed German firms which have a higher adherent level to GRI guidance tend to have greater firm value. The research applies Multiple Regression to test the above relationship by involving 485 observations from 97 large listed German firms within the research period from 2013 to 2017. Along with the main model, a robustness test was performed to explore the connection in the context of a four-month period after the year-end deadline to issue sustainability reports in accordance with German Law. The findings indicate a significant negative relation between firm value and a firm’s GRI adherent level of sustainability reporting.
topic gri adherent status
firm value
sustainability reporting
url https://www.cjournal.cz/index.php?hid=clanek&bid=archiv&cid=378&cp=
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