Non-financial disclosure and stock price informativeness: the role of country-level institutional factors

Paulo Pereira Silva ()
Additional contact information
Paulo Pereira Silva: CEFAGE, Universidade de Évora, Palácio Do Vimioso

Financial Markets and Portfolio Management, 2025, vol. 39, issue 2, No 4, 225-258

Abstract: Abstract This study examines whether non-financial disclosure, and more precisely environmental, social and governance (ESG) disclosure, enhances stock price informativeness with respect to a firm’s future earnings. To do so, we analyse an international sample of listed firms from 24 developed countries and 20 emerging markets and developing economies (EMDEs) in the period 2006–2019. Stock price informativeness is captured by means of the future earnings response coefficient model. Our main research hypothesis postulates that ESG disclosure increases the sensitivity of current stock returns to future earnings. Although the research hypothesis is validated by the data, the impact of ESG disclosure is stronger in developed countries and when the institutional background is more effective. Within this subset of firms, we find a stronger impact amid those with higher information asymmetry and dispersed ownership. In general, ESG disclosure adds little to the information content of stock prices in EMDEs.

Keywords: ESG; Disclosure; Price informativeness (search for similar items in EconPapers)
JEL-codes: G14 G30 M40 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11408-025-00466-9 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:fmktpm:v:39:y:2025:i:2:d:10.1007_s11408-025-00466-9

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/11408/PS2

DOI: 10.1007/s11408-025-00466-9

Access Statistics for this article

Financial Markets and Portfolio Management is currently edited by Manuel Ammann

More articles in Financial Markets and Portfolio Management from Springer, Swiss Society for Financial Market Research Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().