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The Role of Long-Term Institutional Ownership in Sustainability Report Assurance: Global Evidence

Author

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  • Abdulaziz A. Alomran

    (Finance Department, School of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia)

  • Kholod F. Alsahali

    (Department of Business Administration, Jubail Industrial College, Al-Jubayl 35718, Saudi Arabia)

Abstract

Focusing on the role of the institutional investment horizon as a monitoring mechanism that enhances companies’ sustainability reporting reliability, this study investigates the association between long-term ownership and companies’ decisions to assure their sustainability report. Further, the study examines the moderating effect of the quality of governance on this association. Consistent with the critical mass theory, the study argues that long-term ownership should reach a certain threshold to have an influence on companies’ assurance decisions. The study’s results support the argument and find that long-term ownership is positively and significantly associated with companies’ assurance decisions, and the association is positive and significant only for a high level of long-term ownership in comparison to low- and medium-level long-term ownership. Moreover, the study finds that the association between long-term ownership and assurance is negatively moderated by the quality of governance at both the company and country levels.

Suggested Citation

  • Abdulaziz A. Alomran & Kholod F. Alsahali, 2023. "The Role of Long-Term Institutional Ownership in Sustainability Report Assurance: Global Evidence," Sustainability, MDPI, vol. 15(4), pages 1-17, February.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:4:p:3492-:d:1068069
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    References listed on IDEAS

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