Relationship among sustainability disclosure, earnings persistence and economic value added of initial public offering firms: An empirical evidence of Thai listed companies
Keywords:
Sustainability Disclosure, Earnings Persistence, Economic Value Added, Initial Public Offering FirmsAbstract
As investors pay more attention to corporate sustainability and tend to make investment decisions based on sustainability and financial information in evaluating firm performance, this research aims to analyze the relationship among sustainability disclosure, earnings persistence, and economic value added of Initial Public Offering (IPO). In general, information about IPO firms is more limited than that about listed firms. The sample covers 51 Thai listed firms that had their IPO in 2017-2018. Using the Dynamic Panel Data Model, the findings show that firms with more sustainability information disclosure overall and in the dimension of corporate governance are associated with higher earnings persistence consistent with stakeholder theory but lower economic value added, probably in line with the trade-off between benefit and cost of sustainability disclosure. However, economic value added will increase when the company has high earnings persistence and sustainability disclosure. These findings enable investors to make informed decisions based on sustainability information and corporate managers to determine an appropriate sustainability disclosure policy, as well as regulators to refer as a guideline in setting regulations related to sustainability disclosure.
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