Madiha Kiran, Sumayya Chughtai, Mustafa Raza Rabbani and Ahmet Faruk Aysan
This study aims to explore the effect of environmental, social and governance (ESG) disclosure on the cost of finance (debt and equity) and further investigates contextual factors…
Abstract
Purpose
This study aims to explore the effect of environmental, social and governance (ESG) disclosure on the cost of finance (debt and equity) and further investigates contextual factors that might influence this relationship.
Design/methodology/approach
The study analyzes data from 300 nonfinancial firms listed on Next – 11 stock exchanges from 2015 to 2021. It uses panel data estimation techniques for robustness checks, including the fixed effect model, moment quantile regression methods and feasible generalized least square estimation.
Findings
The study finds a significant negative relationship between ESG practices and the cost of finance, highlighting a curvilinear moderating effect of managerial ownership. This suggests that ESG disclosure not only enhances firm value and reduces the cost of finance by improving disclosure quality and addressing stakeholder concerns but also alleviates financing constraints.
Originality/value
This study represents one of the initial endeavors to investigate the influence of ESG disclosure on the financial expenses (debt, equity) in N11 nations, to the extent of the authors’ knowledge. The research presents novel evidence on the curvilinear moderating impact of managerial ownership on these connections in emerging economies.
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Mustafa Raza Rabbani, Madiha Kiran, Abul Bashar Bhuiyan and Ahmad Al-Hiyari
This study aims to investigate the impact of gender diversity in top management teams and boards on environmental, social and governance (ESG) performance. The authors propose a…
Abstract
Purpose
This study aims to investigate the impact of gender diversity in top management teams and boards on environmental, social and governance (ESG) performance. The authors propose a corporate social responsibility (CSR) committee as a moderating variable in this relationship, drawing on resource dependence and legitimacy theories. This study is crucial in understanding the dynamics of gender diversity and its impact on ESG performance in the banking sector.
Design/methodology/approach
The study examines a sample of Islamic and conventional banks from 10 Middle Eastern and North African countries during 2008–2022. Initial analysis was conducted using fixed effects panel regression, whereas the robustness test used the generalized method of movement dynamic system.
Findings
The findings, which are significant for both conventional and Islamic banks, indicate that female directors are crucial in promoting ESG performance in conventional banks. In contrast, female executives do not appear to contribute significantly. However, for Islamic banks, neither board nor executive gender diversity significantly affects ESG performance. Moreover, the find that the positive moderating role of the CSR committee is significant only for the nexus between board gender diversity and conventional banks’ ESG performance and for the connection between executive gender diversity and Islamic banks’ ESG performance.
Originality/value
Despite the widespread belief that gender diversity in top management teams is pivotal in promoting ESG performance, empirical studies supporting these claims are scarce, particularly in the banking sector. The study, therefore, brings a novel perspective to this discourse. These findings have the potential to significantly assist stakeholders in evaluating how gender diversity in top management teams influences banks’ sustainability practices, thereby empowering them to make more informed and impactful investment decisions.
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Rizwan Ali, Ramiz Ur Rehman, Madiha Kanwal, Muhammad Akram Naseem and Muhammad Ishfaq Ahmad
This study aims to examine the key determinants of corporate social responsibility (CSR) disclosure of all listed banks that operate their function in an emerging market, Pakistan.
Abstract
Purpose
This study aims to examine the key determinants of corporate social responsibility (CSR) disclosure of all listed banks that operate their function in an emerging market, Pakistan.
Design/methodology/approach
This study applied the principles of systems-oriented theories such as legitimacy, stakeholder and agency theory. The hypothesis is linking the bank’s social disclosure and its determinants are developed. The relevant data was gathered from the bank’s annual reports and Pakistan Stock Exchange from 2008 to 2018. Further, governance attributes and performance measures are used as the predictor variable and the CSR score as the predicted variable. This study applied panel data analysis on the sampled banks to examine the proposed hypothesis for empirical estimation.
Findings
This study’s inclusive results confirm that the hypothesized determinants of board size, foreign directors on board and female directors on board positively impact the CSR disclosure potential. Board size significantly explains the CSR disclosure in all bank samples. The determined performance measures, profitability and liquidity show a significant positive relationship with CSR disclosure except for few exceptions.
Research limitations/implications
This study’s results lack generalizability due to its unique setting; future researchers can extend the research scope in national–international settings and a regional context.
Practical implications
This study enriches the literature on CSR disclosure determinants and is relevant to practice in an emerging context. It can be helpful from a policy perspective; institutions (bodies) that regulate banks should recognize the governance and performance aspects essential to enhancing CSR disclosure and enhancing the bank’s performance hence value.
Originality/value
This research offers empirical evidence that sheds light on the key governance attributes and performance measures that partially affect CSR disclosure and its extent. In doing so, this study’s findings contribute to the literature significantly, along with regulators, shareholders, deposit holders, individual–institutional investors.