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
Tzouvanas, Panagiotis
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Kizys, Renatas
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Chatziantoniou, Ioannis
46fa1039-98bb-4997-b9f7-3ead71be79aa
Sagitova, Roza
8078d5ad-a6eb-4c6d-8281-080c0375dd76
1 March 2020
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).
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.
Text
Disclosure_and_Risk_2_
- Accepted Manuscript
More information
Accepted/In Press date: 23 February 2020
e-pub ahead of print date: 29 February 2020
Published date: 1 March 2020
Additional Information:
Funding Information:
We are grateful to two anonymous referees for their constructive comments and suggestions that helped us to improve the scope and clarity of this research. We also thank participants of RES Annual conference 2019 and INFINITI Conference on International Finance 2018 as well as seminar participants at University of Sussex for their valuable suggestions and rewarding discussions. We would like to gratefully acknowledge the support of the University of Portsmouth , where part of this research was developed.
Publisher Copyright:
© 2020 Elsevier B.V.
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
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Date deposited: 26 May 2020 16:31
Last modified: 17 Mar 2024 05:28
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Contributors
Author:
Panagiotis Tzouvanas
Author:
Ioannis Chatziantoniou
Author:
Roza Sagitova
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