Year 2020, Volume 28 , Issue 46, Pages 95 - 115 2020-10-31

Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey
Çevresel Açıklama: Belirleyiciler ve Finansal Performans Üzerindeki Etkileri? Türkiye’den Ampirik Bir Kanıt

İsmail KALASH [1]


This article investigates the determinants of environmental disclosure and its effect on financial performance. Using a sample of 66 firms listed on Istanbul Stock Exchange during the period 2014-2018, we find that highly leveraged and larger firms, and firms with higher equity agency costs are more likely to disclose environmental information. However, the results indicated that profitability, industry type, information asymmetry, investment opportunities and business risk do not affect the probability that the firm will disclose environmental information. Finally, we find a weak evidence that environmental disclosure affects the financial performance of Turkish firms.
Bu çalışma, çevresel açıklamanın belirleyicileri ve finansal performans üzerindeki etkilerini incelemektedir. Borsa İstanbul’da (BİST) hisse senetleri işlem gören 66 firmanın 2014-2018 yıllarına ait verilerini kullanarak yüksek kaldıraca ve yüksek özkaynağın temsilci (vekalet) maliyetlerine sahip firmalar ve büyük firmaların çevresel bilgiler açıklama olasılığının daha yüksek olduğu tespit edilmiştir. Yine, karlılık, endüstri tipi, bilgi asimetrisi, yatırım fırsatları ve faaliyet riskinin firmanın çevresel bilgiler açıklama ihtimalini etkilemediği ortaya çıkmıştır. Bununla birlikte, çevresel açıklamanın Türk firmaların finansal performansını etkilediği ile ilgili zayıf bir kanıt bulunmuştur.
  • Aboud, A. & A. Diab (2018), "The Impact of Social, Environmental and Corporate Governance Disclosures on Firm Value: Evidence from Egypt", Journal of Accounting in Emerging Economies, 8(4), 442-458.
  • Ahmadi, A. & A. Bouri (2017), "The Relationship Between Financial Attributes, Environmental Performance and Environmental Disclosure", Management of Environmental Quality, 28(4), 490-506.
  • Akbaş, H. E. & S. Canikli (2019), “Determinants of Voluntary Greenhouse Gas Emission Disclosure: An Empirical Investigation on Turkish Firms”, Sustainability, 11, 107, 1-24.
  • Akbaş, H. E. (2014), “Company Characteristics and Environmental Disclosure: An Empirical Investigation on Companies Listed on Borsa Istanbul 100 Index”, The Journal of Accounting and Finance, 62, 145-164.
  • Akrout, M. M. & H. B. Othman (2016), “Ownership Structure and Environmental Disclosure in Mena Emerging Countries”, Corporate Ownership & Control, 13(4), 381-388.
  • Al-Tuwaijri, S. A. & T. E. Christensen & K. E. Hughes II (2003), “The Relations Among Environmental Disclosure, Environmental Performance, and Economic Performance: A Simultaneous Equations Approach”, http://dx.doi.org/10.2139/ssrn.405643.
  • Andrikopoulos, A. & N. Kriklani (2013), “Environmental Disclosure and Financial Characteristics of the Firm: The Case of Denmark”, Corporate Social Responsibility and Environmental Management, 20, 55-64.
  • Ang, J. S. & R. A. Cole & J. W. Lin (2000), “Agency Costs and Ownership Structure. The Journal of Finance, 55(1), 81-106.
  • Ashfaq, K. & Z. Rui, (2019) "Revisiting the Relationship Between Corporate Governance and Corporate Social and Environmental Disclosure Practices in Pakistan", Social Responsibility Journal, 15(1), 90-119.
  • Braam, G. & L. Uit de Weerd & M. Hauck & M. Huijbregts (2016), “Determinants of Corporate Environmental Reporting: the importance of environmental performance and assurance”, Journal of Cleaner Production, 129, 724-734.
  • Brammer, S. & S. Pavelin (2006), “Voluntary Environmental Disclosures by Large UK Companies”, Journal of Business Finance & Accounting, 33(7) & (8), 1168–1188.
  • Brammer, S. & S. Pavelin (2008), “Factors Influencing the Quality of Corporate Environmental Disclosure”, Business Strategy and the Environment, 17(2), 120-136.
  • Chandok, R. & S. Singh, (2017)," Empirical Study on Determinants of Environmental Disclosure", Managerial Auditing Journal, 32(4/5), 332-355.
  • Clarkson, P. M. & M. B. Overell & L. Chapple (2011), “Environmental Reporting and its Relation to Corporate Environmental Performance”, ABACUS, 47(1), 27-60.
  • Clarkson, P. M. & X. Fang & Y. Li & G. Richardson (2013), “The Relevance of Environmental Disclosures: Are Such Disclosures Incrementally Informative?”, J. Account. Public Policy, 32, 410–431.
  • Clarkson, P. M. & Y. Li & G. D. Richardson & F. P. Vasvari (2008), “Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis”, Accounting, Organizations and Society, 33, 303–327.
  • Connors, E. & H. H. Johnston (2013), “Voluntary Environmental Disclosures in 10-Ks and Environmental Reports: Determinants and Relationship to Firm Risk Premium”, http://dx.doi.org/10.2139/ssrn.2345964.
  • Cormier, D. & I. M. Gordon (2001), “An examination of social and environmental reporting strategies”, Accounting, Auditing & Accountability Journal, 14(5), 587-616.
  • Cormier, D. & M. Magnan & B. V. Velthoven (2005), “Environmental Disclosure Quality in Large German Companies: Economic Incentives, Public Pressures or Institutional Conditions?”, European Accounting Review, 14(1), 3-39.
  • da Silva Monteiro, S. M. & B. Aibar-Guzmán (2010), “Determinants of Environmental Disclosure in the Annual Reports of Large Companies Operating in Portugal”, Corporate Social Responsibility and Environmental Management, 17, 185–204.
  • Deegan, C. & B. Gordon (1996), “A Study of the Environmental Disclosure Practices of Australian Corporations”, Accounting and Business Research, 26(3), 187-199.
  • Deegan, C. (2002), “The Legitimizing Effect of Social and Environmental Disclosures: A Theoretical Foundation”, Accounting, Auditing and Accountability Journal, 15(3), 282-311.
  • Déjean, F. & I, Martinez (2009), “Environmental Disclosure and the Cost of Equity: The French Case”, Accounting in Europe, 6(1), 57-80.
  • Deswanto, R. B. & S. V. Siregar (2018), "The Associations Between Environmental Disclosures with Financial Performance, Environmental Performance, and Firm Value", Social Responsibility Journal, 14(1), 180-193.
  • Dhaliwal, D. S. & O. Z. Li & A. Tsang & Y. G. Yang (2011), “Voluntary Nonfinancial Disclosure and the Cost of Equity Capital: The Initiation of Corporate Social Responsibility Reporting”, The Accounting Review, 86(1), 59-100.
  • Elshabasy, Y. N. (2018), “The impact of corporate characteristics on environmental information disclosure: an empirical study on the listed firms in Egypt”, Journal of Business and Retail Management Research (JBRMR), 12(2), 232-241.
  • Fonseka, M. & T. Rajapakse & G. Richardson (2019), “The Effect of Environmental Information Disclosure and Energy Product Type on the Cost of Debt: Evidence from Energy Firms in China”, Pacific-Basin Finance Journal, 54, 159-182.
  • Fontana, S. & E. D'Amico & D. Coluccia & S. Solimene (2015), "Does Environmental Performance Affect Companies’ Environmental Disclosure?", Measuring Business Excellence, 19(3), 42-57.
  • Freedman, M. & B. Jaggi (2005), “Global warming, commitment to the Kyoto protocol, and accounting disclosures by the largest global public firms from polluting industries”, The International Journal of Accounting, 40, 215– 232.
  • Giannarakis, G. & E. Zafeiriou & G. Arabatzis & X. Partalidou (2017), “Determinants of Corporate Climate Change Disclosure for European Firms”, Corporate Social Responsibility and Environmental Management, 25(3).
  • Gray, R. & M. Javad & D. M. Power & C. D. Sinclair (2001), “Social and Environmental Disclosure and Corporate Characteristics: A Research Note and Extension”, Journal of Business Finance & Accounting, 28(3) & (4), 327-356.
  • Guidry, R. P. & D. M. Patten (2012), “Voluntary Disclosure Theory and Financial Control Variables: An Assessment of Recent Environmental Disclosure Research”, Accounting Forum, 36, 81-90.
  • Hackston. D & M.J. Milne (1996), "Some Determinants of Social and Environmental Disclosures in New Zealand Companies", Accounting, Auditing & Accountability Journal, Vol. 9 Issue: 1, pp.77-108.
  • Hassan, O. A. G. & P. Romilly (2018), “Relations Between Corporate Economic Performance, Environmental Disclosure and Greenhouse Gas Emissions: New Insights”, Business Strategy and the Environment, 27(7), 1–17.
  • 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, 27(8), 1–14.
  • Huang, C. L. & F. H. Kung (2010), “Drivers of Environmental Disclosure and Stakeholder Expectation: Evidence from Taiwan”, Journal of Business Ethics, 96, 435–451.
  • Ismail, A. H. & A. A.Rahman & A. A. Hezabr (2018), "Determinants of Corporate Environmental Disclosure Quality of Oil And Gas Industry in Developing Countries", International Journal of Ethics and Systems, 34(4), 527-563.
  • Jensen, M. C. & W. H. Meckling (1976), “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure”, Journal of Financial Economics, 3(4), 305-360.
  • Jensen, M. C. (1986), “Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers”, American Economic Review, 76(2), 323-329.
  • Juhmani, O. (2014), “Determinants of Corporate Social and Environmental Disclosure on Websites: The Case of Bahrain”, Universal Journal of Accounting and Finance, 2(4), 77-87.
  • Khlif, H. & A. Guidara & M. Souissi (2015), "Corporate Social and Environmental Disclosure and Corporate Performance: Evidence from South Africa and Morocco", Journal of Accounting in Emerging Economies, 5(1), 51-69.
  • Kılıç, M. & C. Kuzey (2019), "The Effect of Corporate Governance on Carbon Emission Disclosures: Evidence from Turkey", International Journal of Climate Change Strategies and Management, 11(1), 35-53.
  • Kolsi, M. C & O. F. Attayah (2018), “Environmental Policy Disclosures and Sustainable Development: Determinants, Measure and Impact on Firm Value for ADX Listed Companies”, Corporate Social Responsibility and Environmental Management, 25(5), 1–12.
  • Kouloukoui, D. & A. M. O. Sant'Anna, S. M. S. Gomes, et al (2019), “Factors Influencing the Level of Environmental Disclosures in Sustainability Reports: Case of Climate Risk Disclosure by Brazilian Companies”, Corporate Social Responsibility and Environmental Management, 26(4), 1–14.
  • Lemma, T. T. & M. Feedman & M. Mlilo & J. D. Park (2018), “Corporate Carbon Risk, Voluntary Disclosure, And Cost of Capital: South African Evidence”, Business Strategy and the Environment, 28(1), 1-16.
  • Li, D. & Y. Zhao & Y. Sun & D. Yin (2017), “Corporate Environmental Performance, Environmental Information Disclosure, and Financial Performance: Evidence from China”, Human and Ecological Risk Assessment: An International Journal, 23(2), 323-339.
  • Li, Y. & M. Gong & X. Zhang & L. Koh (2018), “The Impact of Environmental, Social, and Governance Disclosure on Firm Value: The Role of CEO Power”, The British Accounting Review, 50(1), 60-75.
  • Lim, T. (2001), “Rationality and Analysts’ Forecast Bias”, The Journal of Finance, 56(1), 369-385.
  • Liu, X. & V. Anbumozhi (2009), “Determinant factors of corporate environmental information disclosure: an empirical study of Chinese listed companies”, Journal of Cleaner Production, 17, 593–600.
  • Longoni, A. & R. Cagliano (2018), "Inclusive Environmental Disclosure Practices and Firm Performance: The Role of Green Supply Chain Management", International Journal of Operations & Production Management, 38(9), 1815-1835.
  • Lu, L. W. & M. E. Taylor (2018), "A Study of The Relationships Among Environmental Performance, Environmental Disclosure, and Financial Performance", Asian Review of Accounting, 26(1), pp.107-130.
  • Lu, Y. & I. Abeysekera (2014), “Stakeholders’ Power, Corporate Characteristics, and Social and Environmental Disclosure: Evidence from China”, Journal of Cleaner Production, 64, 426-436.
  • Luo, W. & X. Guo & S. Zhong & J. Wang (2019), “Environmental Information Disclosure Quality, Media Attention and Debt Financing Costs: Evidence from Chinese heavy polluting listed companies”, Journal of Cleaner Production, doi: 10.1016/j.jclepro.2019.05.237.
  • Mathuva, D. M. & J. M. Kiweu (2016), “Cooperative Social and Environmental Disclosure and Financial Performance of Savings and Credit Cooperatives in Kenya”, Advances in Accounting, incorporating Advances in International Accounting, 35, 197-206.
  • Michelon, G. & A. Parbonetti (2012), “The Effects of Corporate Governance on Sustainability Disclosure”, Journal of Management and Governance, 16(3), 477-509.
  • Minutolo, M. C. & W. D. Kristjanpoller & J. Stakeley (2019), “Exploring Environmental, Social, and Governance Disclosure Effects on the S&P 500 Financial Performance”, Bus Strat Env, 1–13. https://doi.org/10.1002/bse.2303.
  • Myers, S.C. (1984), “The Capital Structure Puzzle”, Journal of Finance, 39(3), 575-592.
  • Neu, D. & H. Warsame & K. Pedwell (1998), “Managing Public Impressions: Environmental Disclosures in Annual Reports”, Accounting, Organizations and Society, 23(3), 265-282.
  • Odoemelam, N. & R. G. Okafor (2018), “The Influence of Corporate Governance on Environmental Disclosure of Listed Non-Financial Firms in Nigeria”, Indonesian Journal of Sustainability Accounting and Management, 2(1), 25–49.
  • Ofoegbu, G. N. & N. Odoemelam & R. G. Okafor (2018), “Corporate Board Characteristics and Environmental Disclosure Quantity: Evidence from South Africa (Integrated Reporting) and Nigeria (Traditional Reporting)”, Cogent Business & Management, 5, 1-27.
  • Pahuja, S. (2009),"Relationship Between Environmental Disclosures and Corporate Characteristics: A Study of Large Manufacturing Companies in India", Social Responsibility Journal, 5(2), 227 – 244.
  • Patten, D. M. (2002), “The Relation Between Environmental Performance and Environmental Disclosure: A Research Note”, Accounting, Organizations and Society, 27, 763–7730.
  • Plumlee, M. & D. Brown & R. M. Hayes & R. S. Marshall (2015), “Voluntary Environmental Disclosure Quality and Firm Value: Further Evidence”, J. Account. Public Policy, 34, 336–361.
  • Qiu, Y. & A. Shaukat & R. Tharyan (2016), “Environmental and Social Disclosures: Link with Corporate Financial Performance”, The British Accounting Review, 48(1), 102-116.
  • Rover, S. & F. Murcia & F. Murcia (2015), “The Determinants of Social and Environmental Disclosure Practices: The Brazilian Case”, Environmental Quality Management, 25(1), 5-24.
  • Setyorini, C. T. & Z. Ishak (2012), “Corporate Social and Environmental Disclosure: A Positive Accounting Theory View Point”, International Journal of Business and Social Science, 3(9), 152-164.
  • Shan, Y. G. & D. Taylor (2014), “Theoretical Perspectives on Corporate Social and Environmental Disclosure: Evidence from China”, Journal of Asia-Pacific Business, 15(3), 260-281.
  • Silva da ROSA, F. S. & T. Guesser & N. Hein & E. D. Pfitscher & R. J. Lunkes (2015), “Environmental Impact Management of Brazilian Companies: Analyzing Factors That Influence Disclosure of Waste, Emissions, Effluents, and Other Impacts”, Journal of Cleaner Production, 96, 148-160.
  • Singhania, M. & G. Gandhi (2015), "Social and Environmental Disclosure Index: Perspectives from Indian Corporate Sector", Journal of Advances in Management Research, 12(2), 192-208.
  • Sulaiman, M. & N. Abdullah & A.H. Fatima (2014), “Determinants of Environmental Reporting Quality in Malaysia”, International Journal of Economics, Management and Accounting, 22(1), 63-90.
  • Sun, N. & A. Salama & K. Hussainey & M. Habbash (2010), “Corporate environmental disclosure, corporate governance and earnings management”, Managerial Auditing Journal, 25(7), 679-700.
  • Sutantoputra, A. W. & M. Lindorff & E. P. Johnson (2012), “The relationship between environmental performance and environmental disclosure”, Australasian Journal of Environmental Management, 19(1), 51-65.
  • Toms, J. S. (2002), “Firm Resources, Quality Signals and The Determinants of Corporate Environmental Reputation: Some UK Evidence”, British Accounting Review, 34, 257-282.
  • Vogt, M. & N. Hein & F. Silva da Rosa & L. Degenhart (2017), “Relationship Between Determinant Factors of Disclosure of Information on Environmental Impacts of Brazilian Companies”, Estudios Gerenciales, 33(142), 24-38.
  • Wang, J. & B. Zhang (2019), "Quality of Environmental Information Disclosure and Enterprise Characteristics", Management of Environmental Quality, 35(5), 963-979.
  • Wang, J. L. & H. H. Hsiung & W. T. Ku (2012), “Ownership Structure and Environmental Disclosure: Taiwan Evidence”, International Research Journal of Finance and Economics”, 88, 132-144.
  • Welbeck, E. E. & G. M. Y. Owusu & R. A. Bekoe & J. A. Kusi (2017), “Determinants of Environmental Disclosures of Listed Firms in Ghana”, International Journal of Corporate Social Responsibility, 2(11), 1-12.
  • Yildiz, Ş. & G. Tuna & V. E. Tuna (2016), “Relation Between Company Features and Environmental Statement Within Corporate Social Responsibility: An Application in Chemistry, Petroleum, Rubber and Plastics Products Industry”, Journal of Business Research-Türk, 8(2), 255- 276.
  • Yin, H. & M. Li & Y. Ma & Q. Zhang (2019), “The Relationship between Environmental Information Disclosure and Profitability: A Comparison between Different Disclosure Styles”, International Journal of Environmental Research and Public Health, 16, 1-14.
  • Zeng, S. X. & X. D. Xu & H. T. Yin & C. M. Tam (2012), “Factors that Drive Chinese Listed Companies in Voluntary Disclosure of Environmental Information”, J Bus Ethics, 109, 309–321.
Primary Language en
Subjects Social
Journal Section Articles
Authors

Orcid: 0000-0002-0674-0136
Author: İsmail KALASH (Primary Author)
Institution: DICLE UNIVERSITY
Country: Turkey


Dates

Publication Date : October 31, 2020

Bibtex @research article { sosyoekonomi598290, journal = {Sosyoekonomi}, issn = {1305-5577}, address = {}, publisher = {Sosyoekonomi Society}, year = {2020}, volume = {28}, pages = {95 - 115}, doi = {10.17233/sosyoekonomi.2020.04.05}, title = {Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey}, key = {cite}, author = {Kalash, İsmail} }
APA Kalash, İ . (2020). Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey . Sosyoekonomi , 28 (46) , 95-115 . DOI: 10.17233/sosyoekonomi.2020.04.05
MLA Kalash, İ . "Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey" . Sosyoekonomi 28 (2020 ): 95-115 <https://dergipark.org.tr/en/pub/sosyoekonomi/issue/57521/598290>
Chicago Kalash, İ . "Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey". Sosyoekonomi 28 (2020 ): 95-115
RIS TY - JOUR T1 - Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey AU - İsmail Kalash Y1 - 2020 PY - 2020 N1 - doi: 10.17233/sosyoekonomi.2020.04.05 DO - 10.17233/sosyoekonomi.2020.04.05 T2 - Sosyoekonomi JF - Journal JO - JOR SP - 95 EP - 115 VL - 28 IS - 46 SN - 1305-5577- M3 - doi: 10.17233/sosyoekonomi.2020.04.05 UR - https://doi.org/10.17233/sosyoekonomi.2020.04.05 Y2 - 2020 ER -
EndNote %0 Sosyoekonomi Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey %A İsmail Kalash %T Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey %D 2020 %J Sosyoekonomi %P 1305-5577- %V 28 %N 46 %R doi: 10.17233/sosyoekonomi.2020.04.05 %U 10.17233/sosyoekonomi.2020.04.05
ISNAD Kalash, İsmail . "Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey". Sosyoekonomi 28 / 46 (October 2020): 95-115 . https://doi.org/10.17233/sosyoekonomi.2020.04.05
AMA Kalash İ . Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey. Sosyoekonomi. 2020; 28(46): 95-115.
Vancouver Kalash İ . Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey. Sosyoekonomi. 2020; 28(46): 95-115.
IEEE İ. Kalash , "Environmental Disclosure: Determinants and Effects on Financial Performance? An Empirical Evidence from Turkey", Sosyoekonomi, vol. 28, no. 46, pp. 95-115, Oct. 2020, doi:10.17233/sosyoekonomi.2020.04.05