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The value relevance of banking sector multidimensional corporate sustainability performance

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  • Guler Aras
  • Nuray Tezcan
  • Ozlem Kutlu Furtuna

Abstract

The purpose of this paper is to evaluate Turkish banks' multidimensional corporate sustainability performance and whether banks' sustainability efforts are value related. Both qualitative and quantitative data analysis, namely content analysis, entropy based and TOPSIS techniques, have been utilized in order to measure the sustainability performance. The Spearman rank correlation coefficient has been employed to investigate the nexus between overall sustainability performance scores of the banks and market value during the years 2013 and 2015. The results of this study are insignificant in the ongoing debate on whether Turkish banks' sustainability efforts are value related. However, a significant and positive relationship has been found between the financial sustainability performance and the market value in the long run. Additionally, a multidimensional corporate sustainability model that has the five dimensions of economic, environmental, social, governance and financial disclosures has been proposed. This paper is among the first to explore the nexus between sustainability performance and market value in Turkey.

Suggested Citation

  • Guler Aras & Nuray Tezcan & Ozlem Kutlu Furtuna, 2018. "The value relevance of banking sector multidimensional corporate sustainability performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(6), pages 1062-1073, November.
    • Handle: RePEc:wly:corsem:v:25:y:2018:i:6:p:1062-1073
    DOI: 10.1002/csr.1520
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    2. Jakub Horak & Petr Suler & Jaroslav Kollmann & Jan Marecek, 2020. "Credit Absorption Capacity of Businesses in the Construction Sector of the Czech Republic—Analysis Based on the Difference in Values of EVA Entity and EVA Equity," Sustainability, MDPI, vol. 12(21), pages 1-16, October.
    3. R. Rajesh & Chandrasekharan Rajendran, 2020. "Relating Environmental, Social, and Governance scores and sustainability performances of firms: An empirical analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1247-1267, March.
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    5. Piotr Bolibok, 2021. "The Impact of Social Responsibility Performance on the Value Relevance of Financial Data in the Banking Sector: Evidence from Poland," Sustainability, MDPI, vol. 13(21), pages 1-19, October.
    6. Meltem Kılıç & Hasan Emin Gurler & Ahmet Kaya & Chang Won Lee, 2022. "The Impact of Sustainability Performance on Financial Performance: Does Firm Size Matter? Evidence from Turkey and South Korea," Sustainability, MDPI, vol. 14(24), pages 1-19, December.
    7. Imran Abbas Jadoon & Akhter Ali & Usman Ayub & Muhammad Tahir & Raheel Mumtaz, 2021. "The impact of sustainability reporting quality on the value relevance of corporate sustainability performance," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(1), pages 155-175, January.
    8. Francisco Javier Forcadell & Elisa Aracil & Fernando Ubeda, 2020. "Using reputation for corporate sustainability to tackle banks digitalization challenges," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2181-2193, September.
    9. Wu, Qun & Liu, Xinwang & Qin, Jindong & Zhou, Ligang & Mardani, Abbas & Deveci, Muhammet, 2022. "An integrated multi-criteria decision-making and multi-objective optimization model for socially responsible portfolio selection," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    10. Qi Zhang & Lawrence Loh & Weiwei Wu, 2020. "How do Environmental, Social and Governance Initiatives Affect Innovative Performance for Corporate Sustainability?," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
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