An Empirical Study on the Impact of Sustainability Reporting on Firm Value
Thi Thuc Doan Nguyen
GRI adherent status, firm value, sustainability reporting
Value relevance is an attractive exploratory topic for firms due to its influence on a firm’s competitiveness.
Investigating potential factors that have an impact on firm value can provide management
with the insights in how to enhance value. The aim of this paper is to explore the
association between sustainability reporting and firm value to gain an awareness of the value
relevance of sustainability disclosures. The study concentrates on large listed German firms
as research objects to reduce the influence of firm size, legislation and geographic differences.
Moreover, instead of observing diverse sustainability reporting guidelines in one research, this
paper focuses on the current most popular guidance, the Global Reporting Initiative (GRI).
With this focus, it is more likely to achieve a relevant comparability among the firms’ sustainability
reporting. This concentration also leads to the main research question of whether large
listed German firms which have a higher adherent level to GRI guidance tend to have greater
firm value. The research applies Multiple Regression to test the above relationship by involving
485 observations from 97 large listed German firms within the research period from 2013 to
2017. Along with the main model, a robustness test was performed to explore the connection in
the context of a four-month period after the year-end deadline to issue sustainability reports in
accordance with German Law. The findings indicate a significant negative relation between firm
value and a firm’s GRI adherent level of sustainability reporting.
An Empirical Study on the Impact of Sustainability Reporting on Firm Value [PDF file] [Filesize: 1.02 MB]
Nguyen, T. T. D. (2020). An Empirical Study on the Impact of Sustainability Reporting on Firm Value.
Journal of Competitiveness, 12(3), 119–135. https://doi.org/10.7441/joc.2020.03.07