Impact of Corporate Climate Change Performance on Information Asymmetry: International Evidence

Article

Dey, Sajal Kumar, Bose, Sudipta, Luo, Le and Shams, Syed. 2024. "Impact of Corporate Climate Change Performance on Information Asymmetry: International Evidence ." Journal of International Accounting Research. https://doi.org/10.2308/JIAR-2022-057/12903
Article Title

Impact of Corporate Climate Change Performance on Information Asymmetry: International Evidence

ERA Journal ID19143
Article CategoryArticle
AuthorsDey, Sajal Kumar, Bose, Sudipta, Luo, Le and Shams, Syed
Journal TitleJournal of International Accounting Research
Number of Pages33
Year2024
PublisherAmerican Accounting Association
Place of PublicationUnited States
ISSN1542-6297
1558-8025
Digital Object Identifier (DOI)https://doi.org/10.2308/JIAR-2022-057/12903
Web Address (URL)https://publications.aaahq.org/jiar/article/doi/10.2308/JIAR-2022-057/12903
Abstract

In this study, we examine the association between climate change performance and information asymmetry using 6,367 firm-year observations from 2011 to 2020 across 26 countries. We find that climate change performance is negatively associated with information asymmetry, suggesting that firms with higher climate change performance tend to have lower information asymmetry. We also find that the negative association between climate change performance and information asymmetry is stronger for firms with a higher level of institutional ownership and better corporate governance. Further analyses show a more pronounced negative association between climate change performance and information asymmetry for firms domiciled in countries with stakeholder-oriented business culture, a national emissions trading scheme, and a higher level of climate change performance. Our study’s findings have significant implications for capital market participants, managers, policymakers, researchers, and practitioners worldwide in understanding the role of corporate climate change performance in the capital market.

Keywordsclimate change performance; cross-country; corporate governance; institutional investors; information asymmetry
Contains Sensitive ContentDoes not contain sensitive content
ANZSRC Field of Research 2020350201. Environment and climate finance
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Byline AffiliationsUniversity of Northampton, United Kingdom
University of Newcastle
Macquarie University
University of Southern Queensland
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