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Impact of ESG Disclosure on Stock Returns: Evidence from Egyp Firms with Tax and Governance Effects

Author

Listed:
  • Abobaker Hussainey

    (Department of Management and Organization, German University in Cairo)

  • Zahran Umayah

    (Department of Accounting and Finance, Kemmy Business School, University of Limerick)

  • Hafez Uzmany

    (Department of Accounting, Faculty of Commerce, Zagazig University)

  • Ismail

    (Department of Management and Organization, German University in Cairo)

Abstract

Purpose: This study aims to examine the effect of environmental, social, and governance (ESG) disclosure on stock returns with the moderating effect of tax rate, family ownership and foreign board members in Egypt between 2020 and 2024. Methods: Using a panel of 735 firm-year observations for the top 100 Egyp firms listed on the EGX, the study employs ordinary least squares (OLS) regression together with industry- and year-fixed effects. The analysis controls for size, profitability, leverage, and capital intensity at the firm level. Results: The results indicate that ESG disclosure is positively and significantly related to return (β2 = 0.169), which means that stronger ESG disclosure is connected with better stock performance. Furthermore, tax rate (ETR) has a negative influence on ESG disclosure, and family and foreign board members positively influence the ESG disclosure. Novelty: This is the first study that provides insights into the determinants of ESG disclosure in an emerging market (Egypt) and the economic implications. Implications: These findings underscore the need for ESG transparency for investors and policymakers, and the role of governance in enabling sustainable financial performance.

Suggested Citation

  • Abobaker Hussainey & Zahran Umayah & Hafez Uzmany & Ismail, 2025. "Impact of ESG Disclosure on Stock Returns: Evidence from Egyp Firms with Tax and Governance Effects," Journal Economic Business Innovation, PT. Inovasi Analisis Data, vol. 1(4), pages 461-478.
    • Handle: RePEc:ebi:journl:v:1:y:2025:i:4:p:461-478
    DOI: 10.69725/jebi.v1i4.136
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    References listed on IDEAS

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    1. Anesa, Mattia & Gillespie, Nicole & Spee, A. Paul & Sadiq, Kerrie, 2019. "The legitimation of corporate tax minimization," Accounting, Organizations and Society, Elsevier, vol. 75(C), pages 17-39.
    2. Abdelfattah, Tarek & Aboud, Ahmed, 2020. "Tax avoidance, corporate governance, and corporate social responsibility: The case of the Egyptian capital market," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 38(C).
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