ESG and firms’ market value: The moderating role of information asymmetry

• Autor(a) principal: Mendes, Ana Madalena de Almeida Gama
• Data de Publicação: 2023
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/30737
• topic: ESG; Firms’ market value; Informação assimétrica -- Information asymmetry; Agency theory; Valor de mercado das empresas; Teoria da agência

Over the years, the increased concerns by stakeholders with sustainability matters have led the companies to take action on those matters and disclose their activities in their reports, as a way of improving the perception of stakeholders on them. This research intends to study if ESG reports are value-enhancing the firms’ market value, and not just a mechanism of persuasion of the stakeholders. Furthermore, based on agency theory, it will study the moderating effect of information asymmetry on the previous relationship. For that, information on 353 non-financial companies from the Stoxx 600 Index for the period of 2014 to 2018 was extracted from the Eikon database and resourced to linear regression models to answer the questions in the study. The Firms’ Market Value was measured by the natural logarithm of Tobin’s Q ratio, the ESG measures through ESG Scores and the Information Asymmetry through the bid-ask spread. The results show that the disclosure of ESG information has a positive and significant impact on firms’ market value. Moreover, when analysing the three dimensions separately, all of them positively affect the Firms’ Market Value, but only the social measures do it significantly. Both ESG measures combined and separated verified that the relationship with the Firms’ Market Value is intensified when companies present lower levels of information asymmetry.