Authors: Mohammed Benlemlih Amama Shaukat Yan Qiu Grzegorz Trojanowski
Publish Date: 2016/08/25
Volume: 152, Issue: 3, Pages: 613-626
Abstract
We examine the link between a firm’s environmental E and social S disclosures and measures of its risk including total systematic and idiosyncratic risk While we do not find any link between a firm’s E and S disclosures and its systematic risk we find a negative and significant association between these disclosures and a firm’s total and idiosyncratic risk These are novel findings and are consistent with the predictions of the stakeholder theory and the resourcebased view of the firm suggesting that firms which make extensive and objective E and S disclosures promote corporate transparency that can help them build a positive reputation and trust with their stakeholders This in turn can help mitigate the firms idiosyncratic/operational risk These findings are important for all corporate stakeholders including managers employees and suppliers who have a significant economic interest in the survival and success of the firm
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