This paper investigates the influence of political connections on sustainability disclosure in the context of China's Regulation 18.
Abstract
Purpose
This paper investigates the influence of political connections on sustainability disclosure in the context of China's Regulation 18.
Design/methodology/approach
The study employs a quasi-experimental approach, utilizing difference-in-difference (DiD) analysis, dynamic DiD and propensity score matching to analyze the effects of politically connected independent directors on sustainability disclosure following the implementation of Regulation 18.
Findings
Companies with politically connected independent directors show an improvement in sustainability disclosures after Regulation 18. This effect is stronger for firms facing high political pressure or lacking alternative political power. Additionally, the increase in value from sustainability disclosures compensates for the loss of politically connected independent directors, indicating a positive value impact of sustainability disclosures.
Originality/value
This study provides novel insights into the corporate disclosure policy in China by investigating the impact of politically connected directors on sustainability disclosure. Additionally, it sheds light on the limitations of political power and its substitution effects within companies.
Details
Keywords
This study aims to investigate the relations between CEO gender, power and bank performance. First, this study examines the relation between CEO gender and power. Do female CEOs…
Abstract
Purpose
This study aims to investigate the relations between CEO gender, power and bank performance. First, this study examines the relation between CEO gender and power. Do female CEOs possess less power than male CEOs? As women reach the top, do they hold similar or even higher levels of power as men? Second, this study investigates the relation between the CEO gender and bank performance. How do female CEOs perform? Is the relation between gender and performance subject to CEO power?
Design/methodology/approach
This study uses the following three performance measures: ROA, pre-tax ROA and pre-provision profit over assets. This study follows Finkelstein’s (1992) classifications and adopt five variables to measure the four dimensions of CEO power: duality and compensation share measure structural power; ownership captures ownership power; number of functional areas measures the power of expertise; and elite education captures prestige power. Logit model, ordinary least squares regression and quantile regression methods are used in the analysis.
Findings
In a sample of Chinese banks, female CEOs are found to have similar power and performance as male CEOs. As women reach the top, they hold higher ownership and greater prestige power than men. Female CEOs even outperform male CEOs in non-state dominated banks. Female CEOs show their impact through their power: those with higher compensation shares or greater power are positively related to bank performance.
Originality/value
Overall, the results show that as women reach the top, they hold a higher level of power than men. As females break through the glass ceiling, they perform better than males. Moreover, female CEOs show their impact through their power. Female CEOs who overcome the barriers are less traditional and more self-directed than their peers.
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Vincent Yu, Hsiu‐I Ting and Yen‐Chun Jim Wu
The purpose of this study is twofold: first, to explore whether a linkage between environmental effects and financial performance exists; and second, to investigate whether firms…
Abstract
Purpose
The purpose of this study is twofold: first, to explore whether a linkage between environmental effects and financial performance exists; and second, to investigate whether firms displaying more environmental effort show a more significantly positive relationship between environmental performance and financial performance than those displaying less green effort.
Design/methodology/approach
The study adopts correlation analysis of a sample comprising of 51 European companies from 14 industries across 15 countries to investigate the possible relationship between firm environmental performance (including three measures: sustainable value, sustainable value margin, and return to cost ratio) and financial performance.
Findings
The paper does not find a positive relationship between firm environmental performance and financial performance. Both the Pearson correlations and Spearman's rho are statistically insignificant for both the full sample and the carbon‐intensive sectors. When the lag effect on firm financial performance is considered, the result remains the same. The result suggests that corporate good guys in Europe do not necessarily reap the rewards of their green effort.
Research limitations/implications
Future research may investigate the relationship between firm environmental efforts and financial performance across industries with different technologies and product life cycles, or industries with similar pollutions/emissions or usage pattern of natural resources, such as the petroleum industry and the transportation industry.
Practical implications
Although it was not possible to find a positive association between environmental performance and financial performance, still, being perceived as a green company may improve a company's image and reputation, thus attracting more talented workers and green‐conscious customers.
Originality/value
The paper provides a new perspective on the relationship between firm environmental performance and financial performance in monetary terms by taking a broader view at the environmental outcomes. While past studies only measure firm environmental performance based on damaging impacts to the environment, the research also considers the efficiency of resource use by the firm.
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Keywords
The purpose of the study is to investigate whether the relationship between financial development/investor protection and corporate commitment to sustainability is related to…
Abstract
Purpose
The purpose of the study is to investigate whether the relationship between financial development/investor protection and corporate commitment to sustainability is related to social contagion, neighborhood effect, and community effect.
Design/methodology/approach
The study applies correlation analysis, difference tests, and regression model to a sample comprised of 369 large firms listed on FTSE Global 500 covering 11 industries, located in 31 countries. This paper examines three country‐level variables, financial development index, shareholder rights index, and strength of investor protection, and five corporate commitment to sustainability measures, Carbon Disclosure Leadership Index, Greenhouse Gas (GHG) emissions (direct, electricity indirect, and other indirect GHG emissions), and the corresponding carbon intensity.
Findings
The results support the view that the relationship between financial development/investor protection and corporate commitment to sustainability is associated with social contagion, neighborhood effect, and community effect. Companies are more willing to commit to carbon disclosure for countries with higher financial development. Corporate commitment to sustainability is lower if neighbor countries' financial development or shareholder rights are high. Similarly, companies place less strategic importance on climate change issues if their community countries protect investors better, notwithstanding their relatively low level of other indirect GHG emissions.
Research limitations/implications
Future research may build on this research by supplementing the current data with more variables such as domestic financial sector liberalization or measures, such as business environment, financial stability, and size, depth, and access. The negative relationship between commitment to sustainability and investor rights suggests that investor rights and commitment to sustainability are singing different tunes. Corporate commitment to sustainability does not keep pace with investor rights especially for countries with better shareholder rights or investor protection.
Originality/value
This study provides a new perspective on the relationship between financial development/investor protection and commitment to sustainability. This study contributes to the existing literature by using five measures of corporate commitment to sustainability based on firm‐specific data using a sample of the FTSE Global 500. This paper provides a better understanding of the relationship between country‐level characteristics and commitment to sustainability in an environment where global integration is relatively high.