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External assurance on sustainability report disclosure and firm value: evidence from Indonesia and Malaysia

Author

Listed:
  • Iman Harymawan

    (Airlangga University, Indonesia)

  • Mohammad Nasih

    (Airlangga University, Indonesia)

  • Atila Salsabilla

    (Airlangga University, Indonesia)

  • Fajar Kristanto Gautama Putra

    (Airlangga University, Indonesia)

Abstract

We analyze the content of assurance statements on sustainability reports to examine the extent of external assurance on sustainability report disclosure in Indonesian and Malaysian listed companies and identify their impact on firm value. This research is conducted using 84 samples of listed companies from all industries, except the financial industry, for the period 2010-2016. Ordinary least square (OLS) regression is used to test the research hypothesis. The results show a significant positive effect of external assurance on sustainability report disclosure to a firm value measured by Tobins’Q. Besides, we also found that companies in Indonesia have higher disclosure in terms of external assurance for sustainability reports compared to Malaysia. This study adds new evidence to the literature on sustainability assurance in emerging countries.

Suggested Citation

  • Iman Harymawan & Mohammad Nasih & Atila Salsabilla & Fajar Kristanto Gautama Putra, 2020. "External assurance on sustainability report disclosure and firm value: evidence from Indonesia and Malaysia," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 7(3), pages 1500-1512, March.
    • Handle: RePEc:ssi:jouesi:v:7:y:2020:i:3:p:1500-1512
    DOI: 10.9770/jesi.2020.7.3(5)
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    References listed on IDEAS

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    1. Shameek Konar & Mark A. Cohen, 2001. "Does The Market Value Environmental Performance?," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 281-289, May.
    2. Kamp, A.E.M., 2002. "Towards a framework for auditing environmental reports," Other publications TiSEM bf6004d3-7669-442f-95a4-6, Tilburg University, School of Economics and Management.
    3. Lawrence Loh & Thomas Thomas & Yu Wang, 2017. "Sustainability Reporting and Firm Value: Evidence from Singapore-Listed Companies," Sustainability, MDPI, vol. 9(11), pages 1-12, November.
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    5. Ki‐Hoon Lee & Bum‐Jin Park & Hakjoon Song & Keun‐Hyo Yook, 2017. "The Value Relevance of Environmental Audits: Evidence from Japan," Business Strategy and the Environment, Wiley Blackwell, vol. 26(5), pages 609-625, July.
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    7. Oecd, 2002. "Access for Business," OECD Digital Economy Papers 67, OECD Publishing.
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    Cited by:

    1. Iman Harymawan & Fajar Kristanto Gautama Putra & Bayu Arie Fianto & Wan Adibah Wan Ismail, 2021. "Financially Distressed Firms: Environmental, Social, and Governance Reporting in Indonesia," Sustainability, MDPI, vol. 13(18), pages 1-18, September.
    2. Adam P. Balcerzak & Radka MacGregor Pelikánová, 2020. "Projection of SDGs in Codes of Ethics—Case Study about Lost in Translation," Administrative Sciences, MDPI, vol. 10(4), pages 1-18, November.

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    More about this item

    Keywords

    sustainability report; external assurance; firm value; emerging countries;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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