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The impact of ESG disclosures and institutional ownership on market information asymmetry

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  • Renard Y. J. Siew
  • Maria C. A. Balatbat
  • David G. Carmichael

Abstract

This paper investigates the impact of ESG disclosures and institutional ownership on market information asymmetry for 683 firms listed on the New York Stock Exchange for years 2007–2011. Overall, the results suggest that there is a statistically significant negative relationship between ESG disclosures and bid-ask spread and that the presence of institutional investors reduces market information asymmetry. However, it is further established in this paper that a relatively higher level of institutional ownership may attenuate this effect because there is a tendency for institutional owners to exploit private ESG information gained through their position.

Suggested Citation

  • Renard Y. J. Siew & Maria C. A. Balatbat & David G. Carmichael, 2016. "The impact of ESG disclosures and institutional ownership on market information asymmetry," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(4), pages 432-448, October.
    • Handle: RePEc:taf:raaexx:v:23:y:2016:i:4:p:432-448
    DOI: 10.1080/16081625.2016.1170100
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    2. Tim C. Opler & Jonathan Sokobin, "undated". "Does Coordinated Institutional Activism Work? An Analysis of the Activities of the Council of Institutional Investors," Research in Financial Economics 9505, Ohio State University.
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