IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v18y2025i3p113-d1596810.html
   My bibliography  Save this article

Environmental, Social, and Governance Disclosures and Market Reaction of Thai-Listed Companies in the Alternative Capital Market

Author

Listed:
  • Muttanachai Suttipun

    (Department of Accountancy, Faculty of Management Sciences, Prince of Songkla University (PSU), Hat Yai 90110, Thailand)

  • Pankaewta Lakkanawanit

    (Logistics and Business Analytics Center of Excellence (LOGBIZ), Walailak University, Tha Sala 80160, Thailand)

  • Alisara Saramolee

    (Department of Accountancy, School of Accountancy and Finance, Walailak University (WU), Tha Sala 80160, Thailand)

  • Zulnaidi Yaacob

    (School of Distance Education, Universiti Sains Malaysia, Pulau Pinang 11700, Malaysia)

  • Sillapaporn Srijunpetch

    (The Accounting Education and Technology Committee, Federation of Accounting Professions, Wat Thana 10110, Thailand)

Abstract

The primary aim of this research is to investigate the influence of environmental, social, and governance (ESG) disclosures on the market reaction companies listed in Thailand’s alternative capital market, specifically the Market for Alternative Investment (MAI). This interest stems from the growing body of ESG literature in Thailand. This study analyzes 555 corporate annual reports from 111 firms within the MAI, spanning from 2017 to 2021, to measure ESG disclosures through content analysis. The average common share price is used as a proxy for market reaction. Descriptive analysis, correlation metric, and multiple regression are used to analyze the data. The findings reveal that the most common ESG disclosures are social disclosure, governance disclosure, and environmental disclosure. Additionally, there is a noticeable increase in ESG disclosures over the study period. Underpinned by signaling theory, this study finds that governance disclosure positively affects market reaction, while environmental disclosure has a negative impact. Social disclosure shows no significant relationship with market reaction. The implication of this study is that ESG disclosure is crucial for firms due to its significant impact on investors’ investment decisions. Regulators can use the findings in several ways, such as establishing policies to promote or regulate governance disclosure that positively affects market reactions, providing guidelines for companies on effectively disclosing ESG information, communicating quality information, and building investor confidence.

Suggested Citation

  • Muttanachai Suttipun & Pankaewta Lakkanawanit & Alisara Saramolee & Zulnaidi Yaacob & Sillapaporn Srijunpetch, 2025. "Environmental, Social, and Governance Disclosures and Market Reaction of Thai-Listed Companies in the Alternative Capital Market," JRFM, MDPI, vol. 18(3), pages 1-20, February.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:3:p:113-:d:1596810
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/18/3/113/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/18/3/113/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rio Murata & Shigeyuki Hamori, 2021. "ESG Disclosures and Stock Price Crash Risk," JRFM, MDPI, vol. 14(2), pages 1-20, February.
    2. Christian Chan & Markus Milne, 1999. "Investor reactions to corporate environmental saints and sinners: an experimental analysis," Accounting and Business Research, Taylor & Francis Journals, vol. 29(4), pages 265-279.
    3. Alessandro Carretta & Vincenzo Farina & Duccio Martelli & Franco Fiordelisi & Paola Schwizer, 2011. "The Impact of Corporate Governance Press News on Stock Market Returns," European Financial Management, European Financial Management Association, vol. 17(1), pages 100-119, January.
    4. Sitti Murniati, 2016. "Effect of Capital Structure, Company Size and Profitability on the Stock Price of Food and Beverage Companies Listed on the Indonesia Stock Exchange," Information Management and Business Review, AMH International, vol. 8(1), pages 23-29.
    5. Mohammad Jizi & Rabih Nehme & Aly Salama, 2016. "Do social responsibility disclosures show improvements on stock price?," Journal of Developing Areas, Tennessee State University, College of Business, vol. 50(2), pages 77-95, April-Jun.
    6. Claus Holm & Pall Rikhardsson, 2008. "Experienced and Novice Investors: Does Environmental Information Influence Investment Allocation Decisions?," European Accounting Review, Taylor & Francis Journals, vol. 17(3), pages 537-557.
    7. Rashidah Abdul Rahman & Maha Faisal Alsayegh, 2021. "Determinants of Corporate Environment, Social and Governance (ESG) Reporting among Asian Firms," JRFM, MDPI, vol. 14(4), pages 1-13, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daniel Reimsbach & Rüdiger Hahn, 2015. "The Effects of Negative Incidents in Sustainability Reporting on Investors’ Judgments–an Experimental Study of Third‐party Versus Self‐disclosure in the Realm of Sustainable Development," Business Strategy and the Environment, Wiley Blackwell, vol. 24(4), pages 217-235, May.
    2. Kuruppu, Sanjaya & Milne, Markus J., 2010. "Dolphin deaths, organizational legitimacy and potential employees’ reactions to assured environmental disclosures," Accounting forum, Elsevier, vol. 34(1), pages 1-19.
    3. Helen Brown-Liburd & Jeffrey Cohen & Valentina L. Zamora, 2018. "CSR Disclosure Items Used as Fairness Heuristics in the Investment Decision," Journal of Business Ethics, Springer, vol. 152(1), pages 275-289, September.
    4. de Villiers, Charl & van Staden, Chris J., 2010. "Shareholders’ requirements for corporate environmental disclosures: A cross country comparison," The British Accounting Review, Elsevier, vol. 42(4), pages 227-240.
    5. Linda Espahbodi & Reza Espahbodi & Norma Juma & Amy Westbrook, 2019. "Sustainability priorities, corporate strategy, and investor behavior," Review of Financial Economics, John Wiley & Sons, vol. 37(1), pages 149-167, January.
    6. Consolandi, Costanza & Innocenti, Alessandro & Vercelli, Alessandro, 2009. "CSR, rationality and the ethical preferences of investors in a laboratory experiment," Research in Economics, Elsevier, vol. 63(4), pages 242-252, December.
    7. Richard Yeaw Chong Seow, 2024. "Determinants of environmental, social, and governance disclosure: A systematic literature review," Business Strategy and the Environment, Wiley Blackwell, vol. 33(3), pages 2314-2330, March.
    8. Ferdinand Graf, 2011. "Mechanically Extracted Company Signals and their Impact on Stock and Credit Markets," Working Paper Series of the Department of Economics, University of Konstanz 2011-18, Department of Economics, University of Konstanz.
    9. Hanan Amin Barakat & Nadine Hossam & Nour Tarek & Sara Mohamed & Jana Emad, 2024. "The Impact of Sustainable Investing on Financial Performance," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 16(7), pages 1-86, July.
    10. Laura Corazza & Simone Domenico Scagnelli & Chiara Mio, 2017. "Simulacra and Sustainability Disclosure: Analysis of the Interpretative Models of Creating Shared Value," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(5), pages 414-434, September.
    11. Angus W. H. Yip & William Y. P. Yu, 2023. "The Quality of Environmental KPI Disclosure in ESG Reporting for SMEs in Hong Kong," Sustainability, MDPI, vol. 15(4), pages 1-26, February.
    12. Marcia Sierdovski & Luiz Alberto Pilatti & Priscila Rubbo, 2022. "Organizational Competencies in the Development of Environmental, Social, and Governance (ESG) Criteria in the Industrial Sector," Sustainability, MDPI, vol. 14(20), pages 1-20, October.
    13. Sturm, Philipp, 2013. "Operational and reputational risk in the European banking industry: The market reaction to operational risk events," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 191-206.
    14. Liu, Min & Guo, Tongji & Ping, Weiying & Luo, Liangqing, 2023. "Sustainability and stability: Will ESG investment reduce the return and volatility spillover effects across the Chinese financial market?," Energy Economics, Elsevier, vol. 121(C).
    15. Ans Kolk & Paolo Perego, 2010. "Determinants of the adoption of sustainability assurance statements: an international investigation," Business Strategy and the Environment, Wiley Blackwell, vol. 19(3), pages 182-198, March.
    16. Li, Chao & Wu, Mian & Chen, Xi & Huang, Wenli, 2022. "Environmental, social and governance performance, corporate transparency, and credit rating: Some evidence from Chinese A-share listed companies," Pacific-Basin Finance Journal, Elsevier, vol. 74(C).
    17. Hui Li & Dongsheng Yu & Zhixuan Ke, 2023. "Commercial System Reform, Enterprise Green Innovation and Enterprise ESG Performance," Sustainability, MDPI, vol. 15(19), pages 1-19, October.
    18. Nazim Hussain, 2015. "Impact of Sustainability Performance on Financial Performance: An Empirical Study of Global Fortune (N100) Firms," Working Papers 1, Venice School of Management - Department of Management, Università Ca' Foscari Venezia.
    19. Brennan, Linda & Binney, Wayne & McCrohan, Janelle & Lancaster, Narelle, 2011. "Implementation of environmental sustainability in business: Suggestions for improvement," Australasian marketing journal, Elsevier, vol. 19(1), pages 52-57.
    20. Liyuan Meng & Yuchen Zhang, 2023. "Impact of Tax Administration on ESG Performance—A Quasi-Natural Experiment Based on China’s Golden Tax Project III," Sustainability, MDPI, vol. 15(14), pages 1-23, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:18:y:2025:i:3:p:113-:d:1596810. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.