The consequences of environmental disclosure quality: Evidence from France
Fatma Baalouch, Salma Damak-Ayadi 
, Khaled Hussainey , Issal Haj-Salem
Abstract
We examine the consequences of environmental disclosure (ED) quality. We test to see if ED quality affects the cost of equity capital (COEC), market valuation, and institutional investors. We focus on the French context as France is one of the pioneer countries in the mandatory adoption of ED. Our sample includes companies listed in the Société des Bourses Françaises (SBF) 120 index for the period 2009–2014. To measure ED quality, we use the qualitative attributes of information quality. The manual content analysis is then used to calculate the score of ED quality. We then link our ED measurement with measures of COEC, market valuation, and institutional ownership. Our analysis offers several interesting findings. First, it shows that ED quality negatively impacts COEC. It also shows that ED quality is negatively associated with higher market valuations. Finally, it provides evidence that ED quality positively affects institutional ownership. Our results indicate that enhancing ED quality leads to desirable economic consequences for disclosing companies and investors.
Keywords: Environmental Disclosure Quality, Value Relevance, Cost of Equity Capital, Ownership Holding of Institutional Investors, France
Authors’ individual contribution: Conceptualization — F.B., S.D.-A., and K.H.; Methodology — F.B., S.D.-A., and K.H.; Software — F.B., S.D.-A., and K.H.; Validation — F.B., S.D.-A., and K.H.; Formal Analysis — F.B., S.D.-A., and K.H.; Investigation — F.B., S.D.-A., and K.H.; Resources — F.B., S.D.-A., and K.H.; Data Curation — F.B., S.D.-A., and K.H.; Writing — Original Draft — F.B., S.D.-A., and K.H.; Writing — Review & Editing — F.B., S.D.-A., and K.H., and I.H.-S.; Visualization — F.B., S.D.-A., K.H., and I.H.-S.; Supervision — S.D.-A. and K.H.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: M40, M41, Q56
Received: 25.10.2022
Accepted: 10.10.2023
Published online: 12.10.2023
How to cite this paper: Baalouch, F., Damak-Ayadi, S., Hussainey, K., & Haj-Salem, I. (2023). The consequences of environmental disclosure quality: Evidence from France. Corporate Governance and Sustainability Review, 7(3), 8–20. https://doi.org/10.22495/cgsrv7i3p1
Amount: 14 EUR
