Scoring Sufficiency Economy Philosophy through GRI Standards and Firm Risk: A Case Study of Thai Listed Companies

Veerawin Korphaibool, Pattanaporn Chatjuthamard and Sirimon Treepongkaruna
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Veerawin Korphaibool: Environmental, Development and Sustainability Program, Graduate School, Chulalongkorn University, Phatumwan, Bangkok 10330, Thailand
Pattanaporn Chatjuthamard: Center of Excellence in Management Research for Corporate Governance and Behavioral Finance, Sasin School of Management, Chulalongkorn University, Phatumwan, Bangkok 10330, Thailand
Sirimon Treepongkaruna: Center of Excellence in Management Research for Corporate Governance and Behavioral Finance, Sasin School of Management, Chulalongkorn University, Phatumwan, Bangkok 10330, Thailand

Sustainability, 2021, vol. 13, issue 4, 1-19

Abstract: The purpose of this study is to evaluate sufficiency economy philosophy (SEP) performance through annual reports and voluntary sustainable development reports and examines the relationship between SEP performance and firm-specific risk of Thai listed companies from 2013 to 2018. Based on global reporting initiative (GRI) standards, the SEP performance was measured by aligning each GRI topic with each of the SEP elements to create an SEP scoring system. The scoring system was applied and tested by evaluating 34 firms for six years. The outcome scores were recorded in panel data structure and used to test two competing hypotheses of risk reduction and managerial opportunism. The regression results supported the risk reduction hypothesis and thus practicing SEP reduced firm-specific risk. Since our sample was limited to 34 firms, a two-stage least squares instrumental variable (2SLS-IV) analysis was performed to estimate the causal relationship between SEP performance and firm-specific risk. The result remained negatively and significantly correlated, indicating that SEP practice stimulated business sustainability. The finding suggested that the SEP scoring system was able to capture SEP performance and practicing SEP appeared to reduce firm-specific risk, which was consistent with the risk reduction hypothesis of the stakeholder theory.

Keywords: SEP scoring; sustainable development report; stakeholder theory; global reporting initiative; managerial opportunism (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:4:p:2321-:d:503023

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