ESG Disclosure and Firm Value: Family versus Nonfamily Firms

DOI

10.2991/assehr.k.210531.081How to use a DOI?

Keywords

ESG Disclosure, Firm Value, Family Firms, Ownership Structure

Abstract

This research is motivated by the increasing demand for environmental, social, and governance (ESG) disclosure. This phenomenon raises questions as to whether this information is properly used and provides benefits to the company that published the disclosure. Several studies attempted to observe the cost-benefit of ESG disclosure; however, most of them focused on developed countries. Therefore, this study expands the sample to five developing countries in ASEAN. The benefits to be examined in this study are related to the value of the firms. ESG disclosure can enhance firm value because it provides an understanding of important aspects related to company activities, allowing the investor to identify the best-managed companies and assign a premium value for those companies. Based on this explanation, we expect that ESG disclosure will have a positive association with firm value. The effect of the ownership structure on the benefit from ESG disclosure is also analyzed in this study. The difference between family and nonfamily firm characteristics is why this analysis is important. As we know, family firms have greater information asymmetry than nonfamily firms, and this condition is related to a higher level of disclosure in family firms. Therefore, we expect that family firms will have better ESG disclosure and enhance the benefit of such disclosure to these firms. Our final sample includes 390 firms in the five ASEAN countries with the complete required data in Thomson Reuters Datastream. We collect all required data in dollar currency and use a least square regression model to analyze these data. Based on the result of the study, the conclusion reached is that ESG disclosure has a positive association with firm value. However, the association is lower for family firms than for nonfamily firms. These results show that disclosing ESG information provides some benefits for the company because it helps investors make better decisions and improve their confidence in the company.

Copyright

© 2021, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Annisa Meidiana Thahira
AU  - Aria Farah Mita
PY  - 2021
DA  - 2021/05/31
TI  - ESG Disclosure and Firm Value: Family versus Nonfamily Firms
BT  - Proceedings of the Asia-Pacific Research in Social Sciences and Humanities Universitas Indonesia Conference (APRISH 2019)
PB  - Atlantis Press
SP  - 653
EP  - 657
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.210531.081
DO  - 10.2991/assehr.k.210531.081
ID  - Thahira2021
ER  -