SENSITIVE INDUSTRIES PRODUCE BETTER ESG PERFORMANCE: EVIDENCE FROM EMERGING MARKETS
Autores: Alexandre Sanches Garcia, Wesley Mendes da Silva e Renato Joao Orssatto.
Abstract
Given the rising interest in corporate social responsibility (CSR) globally, this paper investigates whether the financial profile of a firm is associated with superior environmental, social and governance (ESG) performance, considering firms from Brazil, Russia, India, China and South Africa (the so-called BRICS countries) with the aim of addressing a gap in relevant research. The study entails an analysis of ESG performance in sensitive industries (i.e., those subject to systematic social taboos, moral debates, and political pressures and those that are more likely to cause social and environmental damage). To test our hypotheses, we applied linear regressions with a data panel using the Thomson Reuters Eikon™ database to analyze data from 365 listed companies selected from BRICS between 2010 and 2012. The results suggest that companies in sensitive industries present superior environmental performance, even when controlling for the firm’s size and country. Our study contributes to research on both the impact of ESG disclosure and the relationship between financial and ESG performance, as well to the practice of sustainability management in firms in developing countries. Leia mais
INTEGRATED REPORTING AND CAPITAL MARKETS IN AN INTERNATIONAL SETTING: THE ROLE OF FINANCIAL ANALYSTS
Autores: Eduardo Flores, Marco Fasan, Wesley Mendes-da-Silva, Joelson Oliveira Sampaio.
Abstract
This study investigates the interplay between integrated reporting (IR) and capital markets. In particular, building on voluntary disclosure and information processing theories, we hypothesize and empirically find that IR adoption improves analysts’ ability to make accurate earnings forecasts. Whereas previous studies focus on the South African context, we rely on an international sample that also allows us to study the moderating effect of the corporate governance regime (shareholder or stakeholder oriented). The results suggest that IR improves analysts’ ability to make accurate predictions to a larger extent in North America than in Europe, and we derive interesting insights on the much-debated nature of IR. This study offers valuable insights to policy makers interested in improving disclosure practices in the financial market. Leia mais
TESTING THE INSTITUTIONAL DIFFERENCE HYPOTHESIS: A STUDY ABOUT ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND FINANCIAL PERFORMANCE
Autores: Alexandre Sanches Garcia e Renato J. Orsato.
Abstract
Considering the institutional, cultural, and regulatory differences across countries, this research investigates the association between environmental, social, and governance (ESG) performance and financial performance of companies from emerging and developed countries. The institutional difference hypothesis (IDH) suggests that institutional weaknesses in emerging markets affect the relationship between financial performance and corporate social performance (CSP) of companies. This can occur because, under such circumstances, firms are more likely to prioritize the capital accumulation and not recognize the potential strategic benefit of socially responsible investments. To investigate this hypothesis, we performed a regression analysis of panel data study comprising 2,165 companies from developed and emerging countries, covering the period between 2007 and 2014. Our results suggest that there is a prevalence of the institutional environment in relation to the financial and ESG performances of companies. These results are in line with the logic of the IDH. Leia mais
CROSS-BORDER BRANCHING IN THE LATIN AMERICAN BANKING SECTOR
Autores: Luiz Paulo Lopes Fávero, Marco Aurélio dos Santos e Ricardo Goulart Serra.
Abstract
Purpose Branching is not the only way for foreign banks to enter a national market, and it is impractical when there are informational and cultural barriers and asymmetries among countries. The purpose of this paper is to analyze the determinants of cross-border branching in the Latin American banking sector, a region with regulatory disparity and political and economic instability, offering elements to a grounded strategic decision. Design/methodology/approach This study uses data from six Latin American countries. To account for the preponderance of zero counts, classes of zero-inflated models are applied (Poisson, negative binomial, and mixed). Model fit indicators obtained from differences between observed and estimated counts are used for comparisons, considering branches in each region established by banks from every other foreign region of the sample. Findings Branching by foreign banks is positively correlated with the population, GDP per capita, household disposable income, and economic freedom score of the host country. The opposite holds for the unemployment rate and entry regulations of the host country. Originality/value Few paper address cross-border banking in emerging economies. This paper analyzes cross-border branching in Latin America in the context of the current financial integration and bank strategy. Econometrically, its pioneering design allows modeling of inflation of zeros, over-dispersion, and the multilevel data structure. This design allowed testing of a novel country-level variable: the host country’s economic freedom score. Leia mais
THE INFLUENCE OF BOARD STRUCTURE AND OWNERSHIP CONCENTRATION ON GRI REPORTING
Autores: Keysa Manuela Cunha de Mascena, Simone R. Barakat, Giuliana Isabella e Adalberto A. Fischmann.
Abstract
Purpose The purpose of this paper is to investigate the relationship between corporate governance structure and GRI reporting. More specifically, the study seeks to analyse board independence, board size and ownership concentration and their relationships with GRI reporting. Design/methodology/approach The hypotheses of the study were tested in a sample of 287 Brazilian companies listed on the B3, the Brazilian stock exchange, using logistic regression models. Data from 2013 were collected from the Econoinfo and GRI databases. Findings The findings show that there is a positive relationship between both board independence and GRI reporting and board size and GRI reporting, and a neutral relationship between ownership concentration and GRI reporting. These results indicate that the corporate governance structure influences a company’s decision to engage in social issue and stakeholders’ relationship activities. Originality/value The contribution of this study is it presents theoretical arguments and empirical evidence regarding the influence of corporate governance structure on CSD beyond the Anglo-Saxon context. The results show that good corporate governance practices cannot be generalized to different contexts. Leia mais
THE EMPLOYEE IS ALWAYS RIGHT: EMPLOYEE SATISFACTION AND CORPORATE PERFORMANCE IN BRAZIL
Autores: Alexandre Di Miceli da Silveira
Abstract
I investigate the effect of employee satisfaction on corporate performance based on an extensive dataset of 114,004 online reviews of Brazil’s 1,000 largest listed and unlisted firms from 2013 to 2018 posted at a local subsidiary of Glassdoor. I find that overall employee satisfaction is positively associated with firm performance and that this relationship is likely to be economically relevant. Among the four dimensions of employee well-being, the link with performance is most evident for the dimension on culture, followed by career opportunities. On the other hand, the dimension on compensation and benefits was the least connected with firm performance. Taken together, these results support the view that intrinsic motivators are more relevant for superior performance than extrinsic ones popularized by the carrot and stick approach to management. I also find that the influence of employee satisfaction on performance is likely to be asymmetrical, in the sense that workplaces characterized by low satisfaction among workers are more likely to lead to poor performance than best-in-class companies are likely to produce superior performance. To my knowledge, this is the first paper to document an asymmetrical link between firm value and employee satisfaction, as well the first one to investigate this issue in an emerging economy using online reviews. Leia mais