The purpose of this study is to examine the nexus between sustainability disclosure, corruption perception and firm performance through a cross country analysis.
The study period ranges from 2014 to 2021 and the data set comprises non-financial companies across 23 nations comprising of both developed and emerging economies. This study has used a dynamic panel data model, i.e. the system generalized method of moments (SGMM) technique, to examine this issue.
The authors find that sustainable disclosure affects firm performance positively and corruption perception decreases the financial performance. The results explain that effective higher sustainable disclosures help to achieve control and monitor resources by reducing risk and provides strong linkages and expertise. It also affirms that corruption plays a vital role in determining financial performance of the companies. The results also reveal that corruption perception does not influence the sustainable disclosure-performance sensitivity. But in case of emerging economies, corruption reduces the influence of sustainability disclosure on financial performance of the companies.
This study has practical implications for policymakers as well as corporate managers to consider sustainable disclosure norms while framing their policies to derive maximum benefits.
This study is a new investigation that explores the intertwining relationship between sustainable disclosure, corruption and firm performance across the countries.
