The Effect of Eco-sustainability Disclosure in Financial Reports on the Market Value  of Companies: Company Characteristics as Intermediary Role

Salah Jiyad Kadhim; Nejoom Arar Taher; Hussein Falah Hassan

doi:10.61132/anggaran.v2i4.1011

Authors

Salah Jiyad Kadhim Wasit University, College of Economics and Administration, Dept. of Accounting
Nejoom Arar Taher Wasit University, College of Economics and Administration, Dept. of Accounting
Hussein Falah Hassan Federal Internal Audit Service, 8th Audit Division, Kut, Wasit, Iraq

DOI:

https://doi.org/10.61132/anggaran.v2i4.1011

Keywords:

Eco-sustainability, Market value, Company characteristic, Financial Reports

Abstract

Environmental issues have become an increasingly significant topic in the accounting
literature in recent decades. The public's apprehension regarding the financial and
non-financial performance of companies has been heightened by environmental
issues associated with industrial activities, which has resulted in a heightened demand
for the disclosure and examination of environmental reports, particularly in
developed countries. Nevertheless, there is a dearth of research in this field in
developing countries, particularly in the Arab region, including Iraq. Therefore, this
paper aims at investigating the potential impact of disclosure of eco-sustainability in
financial reports on market value and the effect of disclosure of eco-sustainability in
financial reports on market value under the context of company characteristics (size,
age, and loss). This paper draws on the data disclosed by companies listed on the Iraq
Stock Exchange. The hypotheses regarding the impact of eco-sustainability
disclosure in financial reports on market value regarding company characteristics
were verified by selecting 35 joint stock companies from 2011 to 2022. This paper
reached several conclusions. The effect of disclosures regarding eco-sustainability in
financial reports on market value has been revealed. Additionally, the market value of

a company is influenced by the disclosure of eco-sustainability in financial reports, as
indicated by the quality descriptors of the company, namely age and losses. The
paper also found out that the disclosure of eco-sustainability in financial reports does
not affect the market value of the company under the company qualities, as measured
by the company's size.

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