The impact of voluntary sustainability reporting on firm value: Insights from signaling theory

Wesley Friske (), Seth A. Hoelscher () and Atanas Nik Nikolov ()
Additional contact information
Wesley Friske: Missouri State University
Seth A. Hoelscher: Missouri State University
Atanas Nik Nikolov: Appalachian State University

Journal of the Academy of Marketing Science, 2023, vol. 51, issue 2, No 6, 372-392

Abstract: Abstract The purpose of this study is to examine the relationship between voluntary sustainability reporting and firm value, as measured by Tobin’s q. We test three main hypotheses developed from signaling theory and the sustainability reporting literature on a large panel of reporting and non-reporting organizations for the period 2011–2020. The results of a fixed effects panel model suggest that, in general, sustainability reporting is negatively related to Tobin’s q. However, the results also indicate that the relationship between sustainability reporting and Tobin’s q becomes increasingly positive over time. Our conclusion is that sustainability reporting is initially a costly signal, but that it eventually enhances firm value as companies learn how to better communicate sustainability initiatives to stakeholders and investors learn how to properly evaluate reports. Finally, in an analysis of sustainability reporting organizations, we find that external assurance is positively associated with Tobin’s q. External audits appear to increase the credibility of reports. Implications for marketing theory and practice are discussed.

Keywords: Sustainability; Sustainability reporting; Signaling theory; Firm value; Tobin’s q (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://link.springer.com/10.1007/s11747-022-00879-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joamsc:v:51:y:2023:i:2:d:10.1007_s11747-022-00879-2

Ordering information: This journal article can be ordered from
https://www.springer ... gement/journal/11747

DOI: 10.1007/s11747-022-00879-2

Access Statistics for this article

Journal of the Academy of Marketing Science is currently edited by John Hulland, Anne Hoekman and Mark Houston

More articles in Journal of the Academy of Marketing Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().