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Environmental, social, and governance disclosure impact on cash holdings in OECD countries

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submitted on 2023-12-13, 07:29 and posted on 2024-01-17, 09:32 authored by Aws AlHares, Noora AlEmadi, Tarek Abu-Asi, Ruba Al Abed

In this research, we investigate how cash holdings are affected by the environmental, social, and governance (ESG) disclosure practices of corporations. This research provides valuable insights into the ongoing discussion all across the world on ESG disclosure, and mainly 5 countries from the Organisation for Economic Co-operation and Development (OECD), which are the United States of America, Canada, the United Kingdom, Japan, and Australia, over the period 2012–2021. We used Refinitiv Eikon database to measure the variables. The results show there is a significantly negative relation between ESG disclosure and cash holdings in the introduction, growth, and shake-out/decline stages. Lower cash holdings are associated with higher firm performance and a positive value of cash. In spite of using different econometric parameters, other measurements, extra control variables, propensity score matching, and an instrumental variable approach, our results remained unchanged (Arayssi et al., 2020). This paper has recommendations for policymakers, investors, and business organizations. Importantly, our study reveals how higher levels of ESG disclosure lead to better cash-holding practices (Buallay, 2022).

Other Information

Published in: Journal of Governance and Regulation
License: https://creativecommons.org/licenses/by/4.0
See article on publisher's website: https://dx.doi.org/10.22495/jgrv12i2art10

Funding

Open Access funding provided by the Qatar National Library

History

Language

  • English

Publisher

Virtus Interpress

Publication Year

  • 2023

License statement

This Item is licensed under the Creative Commons Attribution 4.0 International License.

Institution affiliated with

  • University of Doha for Science and Technology
  • College of Business - UDST

Related Publications

Countries of Organisation for Economic Co-operation and Development (OECD), the United States of America, Canada, the United Kingdom, Japan, and Australia.