The price of environmental, social and governance practice disclosure: An experiment with professional private equity investors

Patricia Crifo, Vanina D. Forget and Sabrina Teyssier

Journal of Corporate Finance, 2015, vol. 30, issue C, 168-194

Abstract: This paper sheds light on the impact that environmental, social and governance (ESG) corporate practice disclosure has on equity financing. We present a unique framed field experiment in which professional private equity investors competed in closed auctions to acquire fictive firms. We hence observe that corporate non-financial (ESG) performance disclosure impacts firm valuation and investment decision and we quantify to which extent. Main result is an asymmetric effect, investors reacting more to bad ESG practice disclosure than to good ESG ones. Our findings are discussed in terms of practical implications for both investors and firm managers.

Keywords: Corporate finance; Corporate social responsibility; Field experiment; Firm valuation; Private equity (search for similar items in EconPapers)
JEL-codes: C93 D44 G32 M14 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (44)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:30:y:2015:i:c:p:168-194

DOI: 10.1016/j.jcorpfin.2014.12.006

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