Corporate Sustainability Reporting and Firm’s Financial Performance in Emerging Markets

This paper investigates whether corporate sustainability reporting is associated with high firm performance in emerging markets. Using a sample of 24,029 firm-year observations from 14 emerging markets, including China, Egypt, Greece, Hungary, India, Malaysia, Pakistan, the Philippines, Poland, Russia, South Africa, Thailand, Turkey and the United Arab Emirates, we find firms with corporate sustainability reporting is associated with high firm performance. The results are robust even after including the firm-level controls of firm size, leverage, litigation risk, market-to-book ratio, firm age, industry-level control of market competition, and country-level control of the gross domestic product. The findings from this cross-country study provides significant implications for the regulators in promoting sustainability reporting and in assisting investors in making better decisions.