When bigger is not always better: exploring the size-dependent nature of the sustainability reporting-firm valuation relationship

Clifford Reuben D'Costa, Rohit Prabhudesai, Sankalp Purushottam Naik, Ch V V S N V Prasad and Mahima Mishra

International Journal of Productivity and Performance Management, 2024, vol. 74, issue 6, 1953-1970

Abstract: PurposeThis study aims to understand the relationship between a company’s sustainability (ESG) disclosures and its valuation. In addition, it also seeks to analyse the moderating effect of firm size on the association between ESG disclosures and firm valuation.Design/methodology/approachThe NIFTY 200 index comprising India’s top 200 companies by market capitalisation from different industrial sectors was chosen for this study. The sample period was from 2017 to 2022. The fixed effect regression analysis was conducted on the panel data for analysis purposes.FindingsA positive influence of ESG disclosures on firm value was observed, primarily owing to the environmental and social disclosures. Interestingly, the moderating impact of firm size on the linkage between ESG disclosures and firm value was found to be negative.Originality/valueMost extant literature show a positive association between ESG disclosures and firm valuation, which was also observed in our study. However, the study results indicate that larger firms are less likely to benefit from the ESG – firm valuation relationship rather than small firms. This could have key policy-level implications for smaller firms from emerging nations that usually refrain from sustainability disclosures.

Keywords: ESG disclosure; Firm value; Firm size; Fixed effect panel regression (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/ijppm/article/74/6/1953/12 ... better-exploring-the (text/html)
https://www.emerald.com/ijppm/article-pdf/74/6/195 ... ppm-03-2024-0151.pdf (application/pdf)

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:eme:ijppmp:ijppm-03-2024-0151

DOI: 10.1108/IJPPM-03-2024-0151

Access Statistics for this article

International Journal of Productivity and Performance Management is currently edited by Dr Aylin Ates and Dr Berk Kucukaltan

More articles in International Journal of Productivity and Performance Management from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().