Do investors value the nonfinancial disclosure in emerging markets?

Yogesh Chauhan and Surya B. Kumar

Emerging Markets Review, 2018, vol. 37, issue C, 32-46

Abstract: This paper studies the impact of the nonfinancial disclosure on firm value for a large sample of Indian firms, arguably emerging market with poor investor protections and legal enforcement. We proxy the nonfinancial disclosure by the Bloomberg score on the extent of a firm's Environmental, Social, and Governance disclosures, and find positive valuation effects associated with the nonfinancial disclosure. We find the nonfinancial disclosure is more valuable to standalone firms compared to business group firms. This paper shows that the positive valuation effects associated with the nonfinancial disclosure are attributable to lower cost of funds and higher operating cash flows.

Keywords: The nonfinancial disclosure; ESG investing; Firm value; The cost of funds; Business group; Emerging markets; India (search for similar items in EconPapers)
JEL-codes: G32 G34 M14 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:37:y:2018:i:c:p:32-46

DOI: 10.1016/j.ememar.2018.05.001

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