Company Characteristics Linked to ESG Disclosure in Asian Firms

Summary

This study examines why publicly listed Asian companies disclose environmental, social, and governance information. Using panel data and regression models, it tests whether economic sustainability performance, profitability, leverage, and company size are associated with ESG disclosure. The proposed explanation draws on legitimacy theory: companies may disclose more to address social expectations, stakeholder scrutiny, and pressure to maintain acceptance of their business activities.

The reported results show positive associations between each of the four company characteristics and ESG disclosure in the study sample. The analysis uses company and ESG data spanning 2005–2017, with lagged explanatory variables and pooled, fixed-effects, and random-effects models. These findings describe associations in a particular set of Asian listed firms; they do not establish that the characteristics cause disclosure or that ESG reporting predicts investment returns. The authors also note differences in disclosure levels and the need for further development of reporting frameworks.

Key ideas

• The study uses legitimacy theory to explain voluntary ESG disclosure as a response to social expectations and scrutiny.
• Its panel regression links higher ESG disclosure with stronger economic sustainability performance and profitability.
• Higher leverage and larger company size are also positively associated with disclosure in the sample.
• The results concern Asian listed firms over the study period and do not establish causal effects or investment performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.