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Environmental disclosure and idiosyncratic risk in the European manufacturing sector

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posted on 2023-06-09, 20:42 authored by Panagiotis Tzouvanas, Renatas Kizys, Ioannis Chatziantoniou, Roza Sagitova
We study the impact of environmental disclosure on the idiosyncratic risk of European manufacturing firms. Utilizing a panel data set of 288 firms from 17 European countries during the period from 2005 to 2016, we provide evidence that environmental disclosure reduces idiosyncratic risk of investment. Our findings show that this relationship can best be justified by the stakeholder and the legitimacy theories. By contrast, predictions based on managerial opportunism appear to be unsupported by our data. In addition, results reveal that the effect of environmental disclosure on idiosyncratic risk varies significantly across the conditional distribution of idiosyncratic risk. Results remain robust under three different econometric methods; namely, (i) panel data techniques, (ii) dynamic panel data and (iii) quantile regressions.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

Energy Economics

ISSN

0140-9883

Publisher

Elsevier

Article number

a104715

Department affiliated with

  • Accounting and Finance Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2020-02-25

First Open Access (FOA) Date

2021-09-01

First Compliant Deposit (FCD) Date

2020-02-25

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