Skip to main content

Research Repository

See what's under the surface

The impact of voluntary environmental disclosure on firm value: does organizational visibility play a mediation role?

Hassan, Omaima A.G.

Authors

Omaima A.G. Hassan



Abstract

The current study investigates whether organizational visibility, i.e. the extent to which analysts follow, and institutions hold, a firm's stock (Baker et al., 1999, p.47), may explain the mechanism through which corporate environmental disclosure (CED) affects firm value. It explores whether CED impacts organizational visibility, and if so, whether firm value increases in organizational visibility, after accounting for greenhouse gas emissions intensity (GHG) as well as several firm-level and country-level controls. It utilizes a sample of S&P Global 1200 companies from 2010 to 2015. Using structural equation modelling (SEM) to address the complex interrelationships between the variables of interest and employing Full Information Maximum Likelihood (FIML) regression method, the findings show that organizational visibility does not play a statistically significant mediation role on the relationship between CED and firm value. However, organizational visibility is significantly associated with both CED and firm value, which indicates that failing to control for organizational visibility when examining the relationship between CED and firm value could yield misleading results. The results also show that prior CED significantly reduces current GHG. Interestingly, analyst coverage is found to play a full mediation role on the relationship between institutional ownership and firm value as well as a partial mediation role on the relationship between prior GHG and firm value. Thus, this study suggests that corporate management lobby financial analysts and educate them about their firms' environmental disclosure and performance to improve their information set and increase firm visibility and value.

Journal Article Type Article
Publication Date Dec 31, 2018
Journal Business strategy and the environment
Print ISSN 0964-4733
Electronic ISSN 1099-0836
Publisher Wiley Open Access
Peer Reviewed Peer Reviewed
Volume 27
Issue 8
Pages 1569-1582
Institution Citation HASSAN, O.A.G. 2018. The impact of voluntary environmental disclosure on firm value: does organizational visibility play a mediation role? Business strategy and the environment [online], 27(8), pages 1569-1582. Available from: https://doi.org/10.1002/bse.2217
DOI https://doi.org/10.1002/bse.2217
Keywords Analyst coverage; Analysts following; Institutional ownership; Organisational visibility; Firm value; Greenhouse gases; Environmental disclosure; Environmental performance; Environmental policy

Files

This file is under embargo until Aug 15, 2020 due to copyright reasons.

Contact publications@rgu.ac.uk to request a copy for personal use.





Downloadable Citations