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The impact of environmental, social, and governance disclosure on firm value: The role of CEO power

Li, Yiwei and Gong, Mengfeng and Zhang, Xiu-Ye and Koh, Lenny (2018) 'The impact of environmental, social, and governance disclosure on firm value: The role of CEO power.' The British Accounting Review, 50 (1). 60 - 75. ISSN 0890-8389

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Abstract

Using a large cross-sectional dataset comprising of FTSE 350 listed firms, this study investigates whether superior environmental, social and corporate governance (ESG) disclosure affects firm value. We find a positive association between ESG disclosure level and firm value, suggesting that improved transparency and accountability and enhanced stakeholder trust play a role in boosting firm value. We also report that higher CEO power enhances the ESG disclosure effect on firm value, indicating that stakeholders associate ESG disclosure from firms with higher CEO power with greater commitment to ESG practice. This evidence is strong and consistent for three different measures of ESG-related disclosure: the ESG, environmental and social disclosure scores. The results are robust to the use of an instrumental variable approach, and the Heckman two-stage estimation procedure.

Item Type: Article
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Elements
Date Deposited: 29 Nov 2019 11:30
Last Modified: 29 Nov 2019 11:30
URI: http://repository.essex.ac.uk/id/eprint/26074

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