شواهدی از مصر در مورد تاثیر افشاگری حاکمیت شرکتی بر ارزش شرکت
Abstract
1- Introduction
2- Environmental, social and governance practices in the Egyptian context
3- Literature review
4- Research design
5- Results
6- Conclusion
References
Abstract
Purpose: The purpose of this paper is to examine the impact of environmental, social, and governance (ESG) practices disclosure and firm value in the Egyptian context. This is done through investigating the influence of being listed and ranked in the Egyptian Corporate Responsibility Index on firm value during the period starting from 2007 to 2016.
Design/methodology/approach: Using univariate and multivariate analyses, the findings support the economic benefits of ESG disclosures.
Findings: The authors find that firms listed in the ESG index have higher firm value, and that there is a positive association between firms’ higher rankings in the index and firm value, as measured by Tobin’s q.
Introduction
A large number of previous studies have analysed the direct link between corporate social responsibility (CSR) and corporate financial performance, and ultimately firm value (Dhaliwal et al., 2011; Harjoto and Jo, 2015; Yadav et al., 2016). Despite these efforts, there are still on-going debates and controversial arguments about the relationship between CSR reporting and firm value (Fatemi et al., 2017). Moreover, although corporate governance (CG) is related to CSR and has an impact on organisational performance ( Jo and Harjoto, 2011; McBarnet et al., 2007), it is only few studies that examine both factors together and address the effect of environmental, social and governance (thereafter ESG) disclosures on firm value (see Eccles et al., 2014; Fatemi et al., 2015). Most of these studies are investigating ESG in developed contexts (e.g. Harjoto and Jo, 2015; Plumlee et al., 2015; Yadav et al., 2016), and very few studies focused on emerging markets (see Malarvizhi and Matta, 2016; Siagian et al., 2013). We believe that emerging markets, with its idiosyncrasies in terms of cultural specificity and political volatility, need special interest. In this study, we investigate the combined impact of ESG disclosures on firm values in Egypt. In doing so, we use the Standard & Poor’s (S&P)/EGX ESG Index (Egyptian Corporate Responsibility Index)[1]. The Index was constructed recently to rank the best 30 companies from the pool of the top 100 Egyptian companies listed in the Egyptian stock market in terms of their disclosures of social and environmental issues as well as their CG practices. For more reliable results, we investigate a long period that covers the years from 2007 (when the index was first initiated) to 2016. The index uses CG and CSR norms and standards to evaluate the actions and programs of the listed firms. Most of the studies that have addressed Egyptian CG and social practices focused more on the level of adherence to standards and codes (Eldomiaty et al., 2016). Nevertheless, the market consequences of ESG disclosures still remain unclear, especially in the Egyptian context. We investigate the reactions of an emerging stock market to CG and CSR. That is, we investigate whether the companies that are concerned more with CG and CSR perform better than those that are not. In other words, we address the question of whether CG and CSR matter in an emerging market or, otherwise, they do not make any difference and has no relation to firm value when we come to an emerging market such as Egypt. If ESG is found to have no relation to firm value, for example, this will be the contrast of the case in developed contexts where CG and CSR disclosures are mostly reported to have noticeable (positive) influence on firm value (see Clarkson et al., 2013; Eccles et al., 2014; Middleton, 2015). This debate needs further investigation to stand at the real influence of both CG and CSR practices disclosures in an emerging market. This in turn will help us reveal whether the context and hence the culture (whether developed or emerging) play a part in the influence of CG and CSR disclosures on firm value or not. Thus, this study has two main objectives. The first one, a generic one, is investigating the impact of being listed in the ESG index on firm value. The second objective is more specific: investigating the impact of the ranking of a firm in the ESG index on the firm value (e.g. does the firm value of the company ranked 20th better than the value of the company ranked 30th?).