Assessing the Role of Sustainability Disclosure on Firms’ Financial Performance: Evidence from the Energy Sector of Belt and Road Initiative Countries

Dejun Zhou (), Ummar Faruk Saeed and Andrew Osei Agyemang ()
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Dejun Zhou: School of Law, Jiangsu University, Zhenjiang 212013, China
Ummar Faruk Saeed: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China
Andrew Osei Agyemang: School of Finance and Economics, Jiangsu University, Zhenjiang 212013, China

Sustainability, 2024, vol. 16, issue 2, 1-21

Abstract: This study examines the influence of sustainability disclosure on a firm’s financial performance in the energy sector, taking into account the role of ownership concentration as a moderating factor. This study utilized secondary data from 239 energy companies from the Belt and Road Initiative (BRI) nations from 2009 to 2022. This study employed the Common Correlated Effect Mean Group and the Pooled Mean Group estimators for the analysis. To determine which component of sustainability disclosure influences a firm’s financial performance, this study divided the measurement of sustainability into three themes: environment, social, and governance. The findings revealed a positive relationship between environmental disclosure and financial performance. Similarly, we found a positive relationship between social disclosure and financial performance. However, governance disclosure does not contribute to financial performance. Furthermore, we found that ownership concentration positively moderates the association between environmental disclosure and financial performance, as well as social disclosure and financial performance. The results suggest that energy firms in developing countries should prioritize disclosing their environmental and social policies to ensure long-term financial performance.

Keywords: sustainability disclosure; financial performance; ownership concentration; energy sector; Belt and Road Initiative countries (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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