Disclosure of corporate sustainability performance and firm performance in Asia

Najul Laskar and Santi Gopal Maji

Asian Review of Accounting, 2018, vol. 26, issue 4, 414-443

Abstract: Purpose - The purpose of this paper is to examine the disclosure pattern of corporate sustainability (CS) and the influence of sustainability reporting on firm performance of four countries in Asia – Japan, South Korea, Indonesia and India. Design/methodology/approach - The authors have collected the sustainability reports and annual reports of 111 firms from four Asian countries for a period of six years. Based on the framework of Global Reporting Initiatives (GRI, 3 and 3.1), content analysis is used for calculating the disclosure score of corporate sustainability performance (CSP). These scores are further used to examine the impact on firm performance by employing a panel data regression model. Findings - The study finds that the average level and quality of disclosure are the highest for Japanese firms, followed by India and South Korea. However, in the case of Indonesia, the average score is very low. Further, the study finds a significant difference in the disclosure of overall sustainability as well as components of sustainability between the countries. The regression results indicate the positive impact of CSP (both in terms of level and quality) on MBR. Specifically, the outcome of the regression model reveals that both the level and quality disclosure of CS are crucial for enhancing firm value for both the developed and developing countries of Asia. Moreover, the relative influence of CSP (both in terms of level and quality) on firm performance is found to be more in developed countries than the developing countries of Asia. Originality/value - This is the first comprehensive study in the Asian context to investigate the disclosure pattern of CSP and also examine the association between CSP and firm performance by employing the panel data model. The outcome of this study is useful for policy implication.

Keywords: Asia; Global reporting initiatives; Firm performance; Content analysis; Corporate sustainability reporting (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:ara-02-2017-0029

DOI: 10.1108/ARA-02-2017-0029

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