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Does the Impact of Transparency and Disclosure on the Firm’s Valuation Depend on the ESG?

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  • Venkata Mrudula Bhimavarapu

    (Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune 412115, India
    School of Commerce & Management, D Y Patil International University, Akurdi, Pune 411044, India)

  • Shailesh Rastogi

    (Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune 412115, India)

  • Rajani Gupte

    (Department of Management, Symbiosis International (Deemed University), Pune 412115, India)

  • Geetanjali Pinto

    (Department of Finance, SIES School of Business Studies, Navi Mumbai 400706, India)

  • Sudam Shingade

    (Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune 412115, India)

Abstract

The global economic crisis in 1997 significantly impacted all corporate firms. Measuring valuation is becoming increasingly important in corporate firm analysis. Transparency in disclosures enables a company to meet market expectations while also adhering to regulatory requirements. The study’s primary purpose is to measure the impact of transparency and disclosures on the valuation of non-financial firms in India and explore the role of Environmental, social and Governance (ESG) as a moderator variable in determining the firm’s value. Panel data regression is the methodology adopted for the data analysis in the study. Panel Data of seventy-six non-financial firms was collected for ten years (2011–2020). Market capitalization is considered as a proxy variable for the valuation. The study results indicate that transparency and disclosures (TD) have a negative and significant influence on the value of the firms. Inferring that a higher degree of TD reduces the firm value. At the same time, the interaction term of TD and ESG show a positive significant association. This finding implies that high ESG reduces the negative impact of high TD on the valuation.

Suggested Citation

  • Venkata Mrudula Bhimavarapu & Shailesh Rastogi & Rajani Gupte & Geetanjali Pinto & Sudam Shingade, 2022. "Does the Impact of Transparency and Disclosure on the Firm’s Valuation Depend on the ESG?," JRFM, MDPI, vol. 15(9), pages 1-12, September.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:9:p:410-:d:915492
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    References listed on IDEAS

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    2. Fiorillo, Paolo & Santilli, Gianluca, 2024. "The influence of shareholder ESG performance on corporate sustainability: Exploring the role of ownership structure," Finance Research Letters, Elsevier, vol. 67(PA).

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