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The Role of Sustainability Reporting in Reducing Information Asymmetry: The Case of Family- and Non-Family-Controlled Firms

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  • Abdul Rahman Al Natour

    (Department of Accounting, Faculty of Administrative & Financial Sciences, University of Petra, Amman 11196, Jordan)

  • Rasmi Meqbel

    (Department of Accounting, Faculty of Economic and Administrative Sciences, The Hashemite University, Zarqa 13133, Jordan)

  • Salah Kayed

    (Department of Accounting, Faculty of Economic and Administrative Sciences, The Hashemite University, Zarqa 13133, Jordan)

  • Hala Zaidan

    (Department of Accounting, School of Business, The University of Jordan, Amman 11942, Jordan)

Abstract

This study aims to examine the link between sustainability reporting and information asymmetry in family- and non-family-controlled firms for a sample of 641 UK firms listed in the FTSE all-share index during the period 2010–2017. The findings show a negative and significant relationship between sustainability reporting and IA. The results also show that the sustainability reporting–information asymmetry nexus is weaker in family-controlled firms. The findings of this study should improve our understanding of sustainability reporting motivations, particularly in companies that are controlled by families. Moreover, an explanation of the role of family-controlled firms in mitigating or exacerbating this relationship will surely help the British regulators improve corporate governance rules related to various ownership structures. For policy makers, it is important to confirm that sustainability reporting is representative of actual corporate activities and is not only used to mislead stakeholders.

Suggested Citation

  • Abdul Rahman Al Natour & Rasmi Meqbel & Salah Kayed & Hala Zaidan, 2022. "The Role of Sustainability Reporting in Reducing Information Asymmetry: The Case of Family- and Non-Family-Controlled Firms," Sustainability, MDPI, vol. 14(11), pages 1-17, May.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:11:p:6644-:d:826920
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    2. Abdul Rahman Al Natour & Naim Salameh Al-Qadi & Rasmi Meqbel & Hala Zaidan & Hamzah Al-Mawali & Manaf Al-Okaily, 2023. "The Role of Privatisation in Sustaining Auditor Independence: Evidence from the Developing Markets," Sustainability, MDPI, vol. 15(8), pages 1-17, April.
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    4. Sofia Brunelli & Salvatore Sciascia & Massimo Baù, 2024. "Nonfinancial reporting in family firms: A systematic review and agenda for future research," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 162-179, February.

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