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Environmental disclosure and idiosyncratic risk in the European manufacturing sector

Environmental disclosure and idiosyncratic risk in the European manufacturing sector
Environmental disclosure and idiosyncratic risk in the European manufacturing sector
We study the impact of environmental disclosure on the idiosyncratic risk of European manufacturing firms. Utilizing a panel data set of 288 firms from 17 European countries during the period from 2005 to 2016, we provide evidence that environmental disclosure reduces idiosyncratic risk of investment. Our findings show that this relationship can best be justified by the stakeholder and the legitimacy theories. By contrast, predictions based on managerial opportunism appear to be unsupported by our data. In addition, results reveal that the effect of environmental disclosure on idiosyncratic risk varies significantly across the conditional distribution of idiosyncratic risk. Results remain robust under three different econometric methods; namely, (i) panel data techniques, (ii) dynamic panel data and (iii) quantile regressions.
Environmental Disclosure, Idiosyncratic Risk, Panel data
0140-9883
Tzouvanas, Panagiotis
f8c0fae8-aebe-406b-9df5-e40fd4c81fbb
Kizys, Renatas
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Chatziantoniou, Ioannis
46fa1039-98bb-4997-b9f7-3ead71be79aa
Sagitova, Roza
8078d5ad-a6eb-4c6d-8281-080c0375dd76
Tzouvanas, Panagiotis
f8c0fae8-aebe-406b-9df5-e40fd4c81fbb
Kizys, Renatas
9d3a6c5f-075a-44f9-a1de-32315b821978
Chatziantoniou, Ioannis
46fa1039-98bb-4997-b9f7-3ead71be79aa
Sagitova, Roza
8078d5ad-a6eb-4c6d-8281-080c0375dd76

Tzouvanas, Panagiotis, Kizys, Renatas, Chatziantoniou, Ioannis and Sagitova, Roza (2020) Environmental disclosure and idiosyncratic risk in the European manufacturing sector. Energy Economics, 87, [104715]. (doi:10.1016/j.eneco.2020.104715).

Record type: Article

Abstract

We study the impact of environmental disclosure on the idiosyncratic risk of European manufacturing firms. Utilizing a panel data set of 288 firms from 17 European countries during the period from 2005 to 2016, we provide evidence that environmental disclosure reduces idiosyncratic risk of investment. Our findings show that this relationship can best be justified by the stakeholder and the legitimacy theories. By contrast, predictions based on managerial opportunism appear to be unsupported by our data. In addition, results reveal that the effect of environmental disclosure on idiosyncratic risk varies significantly across the conditional distribution of idiosyncratic risk. Results remain robust under three different econometric methods; namely, (i) panel data techniques, (ii) dynamic panel data and (iii) quantile regressions.

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Accepted/In Press date: 23 February 2020
e-pub ahead of print date: 29 February 2020
Published date: 1 March 2020
Keywords: Environmental Disclosure, Idiosyncratic Risk, Panel data

Identifiers

Local EPrints ID: 440973
URI: http://eprints.soton.ac.uk/id/eprint/440973
ISSN: 0140-9883
PURE UUID: e86930b1-30ff-4a7a-ab52-a7edbcc6c0a6
ORCID for Renatas Kizys: ORCID iD orcid.org/0000-0001-9104-1809

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Date deposited: 26 May 2020 16:31
Last modified: 28 Apr 2022 05:31

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Contributors

Author: Panagiotis Tzouvanas
Author: Renatas Kizys ORCID iD
Author: Ioannis Chatziantoniou
Author: Roza Sagitova

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