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Exploring the nexus between past financial performance and voluntary GRI adoption: The role of environmental certification

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  • Li, Bingjie
  • Duan, Zhao
  • Cai, Qibin

Abstract

Numerous firms have adopted the Global Reporting Initiative (GRI) standards to enhance sustainability. Using panel data from 2008 to 2020, we employ logit, probit, complementary log-log, and Cox survival analysis models to explore the factors which affect the adoption of the GRI standards in the context of voluntary disclosure in China. Our findings indicate that past financial performance significantly influences decisions on GRI adoption. Environmental certification moderates the effect of financial performance on GRI adoption. Notably, the cross-sectional test reveals that financial performance plays a stronger role in GRI adoption among companies with low information transparency compared to those with high information transparency.

Suggested Citation

  • Li, Bingjie & Duan, Zhao & Cai, Qibin, 2024. "Exploring the nexus between past financial performance and voluntary GRI adoption: The role of environmental certification," Finance Research Letters, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:finlet:v:66:y:2024:i:c:s154461232400686x
    DOI: 10.1016/j.frl.2024.105656
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    More about this item

    Keywords

    GRI adoption; Sustainable development; Financial performance; Environmental certification; Information transparency; Chinese firms;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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