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The Causal Link between Sustainable Disclosure and Information Asymmetry: The Moderating Role of the Stakeholder Protection Context

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  • Jennifer Martínez‐Ferrero
  • David Ruiz‐Cano
  • Isabel‐María García‐Sánchez

Abstract

The main focus in this study is on analyzing the effect that voluntary information disclosure concerning corporate social responsibility (CSR) has on information asymmetry and its evidence in the stakeholder protection context. The use of the generalized method of moments (GMM) estimator for an international sample of 575 for the period 2003 to 2009, highlights how voluntary disclosure regarding CSR aspects reduces the problems of asymmetric information between the different market agents, which is especially important in environments characterized by a strong focus and commitment to stakeholders. Moreover, voluntary disclosure of information could arise from the existence of private information and agency conflicts. Therefore and in addition, this evidence is complemented by showing the bidirectional relationship between voluntary disclosure and asymmetric information in such environments. Thus, greater asymmetric information leads to higher voluntary information disclosure practices, which are able to reduce the agency problem in environments characterized by strong socially responsible commitment. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment

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  • Jennifer Martínez‐Ferrero & David Ruiz‐Cano & Isabel‐María García‐Sánchez, 2016. "The Causal Link between Sustainable Disclosure and Information Asymmetry: The Moderating Role of the Stakeholder Protection Context," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(5), pages 319-332, September.
    • Handle: RePEc:wly:corsem:v:23:y:2016:i:5:p:319-332
    DOI: 10.1002/csr.1379
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    2. Akrum Helfaya & Tantawy Moussa, 2017. "Do Board's Corporate Social Responsibility Strategy and Orientation Influence Environmental Sustainability Disclosure? UK Evidence," Business Strategy and the Environment, Wiley Blackwell, vol. 26(8), pages 1061-1077, December.
    3. Isabel‐María García‐Sánchez & Jennifer Martínez‐Ferrero, 2018. "How do Independent Directors Behave with Respect to Sustainability Disclosure?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(4), pages 609-627, July.
    4. María L. Gallén & Carlos Peraita, 2017. "The Relationship between Femininity and Sustainability Reporting," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(6), pages 496-508, November.
    5. Isabel‐María García‐Sánchez & Ligia Noguera‐Gámez, 2017. "Integrated Reporting and Stakeholder Engagement: The Effect on Information Asymmetry," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(5), pages 395-413, September.
    6. Joel A. Martínez-Regalado & Cinthia Leonora Murillo-Avalos & Purificación Vicente-Galindo & Mónica Jiménez-Hernández & José Luis Vicente-Villardón, 2021. "Using HJ-Biplot and External Logistic Biplot as Machine Learning Methods for Corporate Social Responsibility Practices for Sustainable Development," Mathematics, MDPI, vol. 9(20), pages 1-16, October.
    7. Cao Thi Mien Thuy & Trinh Quoc Trung & Nguyen Vinh Khuong & Nguyen Thanh Liem, 2021. "From Corporate Social Responsibility to Stock Price Crash Risk: Modelling the Mediating Role of Firm Performance in an Emerging Market," Sustainability, MDPI, vol. 13(22), pages 1-17, November.
    8. Simone Terzani & Teresa Turzo, 2021. "Religious social norms and corporate sustainability: The effect of religiosity on environmental, social, and governance disclosure," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(1), pages 485-496, January.
    9. Víctor Amor‐Esteban & María Purificación Galindo‐Villardón & Isabel‐María García‐Sánchez, 2020. "Bias in composite indexes of CSR practice: An analysis of CUR matrix decomposition," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1914-1936, July.
    10. Hanna Czaja-Cieszyńska & Dominika Kordela & Beata Zyznarska-Dworczak, 2021. "How to make corporate social disclosures comparable?," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 9(2), pages 268-288, December.
    11. Zhihong Wang & Tien‐Shih Hsieh & Joseph Sarkis, 2018. "CSR Performance and the Readability of CSR Reports: Too Good to be True?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(1), pages 66-79, January.

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