Title : Financially Distressed Firms: Environmental, Social, and Governance Reporting in Indonesia
Authors:
- Harymawan Faith
- Fajar Kristanto Gautama Putra
- Bayu Arie Fianto
- Wan Adibah Wan Ismail
Department : Accounting
Journal Name : Sustainability
Kinds of Journal : Q1
Keywords : financial distress; ESG Disclosure; CSR Disclosure; sustainability reporting; risk preference
Abstract:
This study examines the relationship between financial distress and environmental, social, and governance (ESG) disclosure. We hypothesize that financially distressed firms are tempted to enhance ESG disclosure as it provides higher performance in terms of financial and market perspectives. ESG Disclosure Needs Substantive Resources, which financially distributed firms may not be able to provide. In Indonesian Settings, we find that financially distressed firms have lower Esg disclosure quality than non-distributed firms. Our results are robust due to lagged variable, heckman's two stages, and coarsened exact matching regression showing consistent results. Furthermore, our results are consistent with three years of rolling Windows of Financial Distress and All Sects of ESG Reporting, Except the General Information Section. This study extends the scope of prior studies by focusing on firms' eagergeneness to provide higher quality ESG Disclosure, Particularly Distressed Firms.
For details : https://doi.org/10.3390/su131810156
