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Carbon disclosure, carbon performance and financial performance: International evidence

Md Abubakar Siddique, Md Akhtaruzzaman, Afzalur Rashid and Helmi Hammami

International Review of Financial Analysis, 2021, vol. 75, issue C

Abstract: This study examines how carbon performance affects carbon disclosure and how carbon disclosure affects financial performance. With a sample of global firms, the study analyses how relationships between carbon disclosure, carbon performance and financial performance vary in institutional contexts. Our results show that carbon disclosure positively affects carbon performance, consistent with the signalling theory. We find that carbon disclosure negatively (positively) affects financial performance in the short-term (long-term). Our findings have significant implications for investors as some firms use carbon disclosure as part of impression management. Our results help regulators to monitor carbon disclosure and assist investors with investment decisions.

Keywords: Carbon disclosure; Carbon performance; financial performance (search for similar items in EconPapers)
JEL-codes: G10 G15 G18 G19 G20 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.irfa.2021.101734

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