Abstract
A number of studies in environmental disclosure have suggested that corporates accountable for environmental responsibility practice have lower cost of capital. However, this relationship has not yet been discovered in Vietnam. The purpose of this study is to examine the relationship between environmental disclosure and the equity cost of 115 non-financial companies listed on Vietnamese stock market from 2014 to 2017 with 460 observations. This study uses the panel data regression model (the fixed effects model (FEM) and the random effects model (REM)) to assess the impact of environmental disclosure on the equity cost of listed companies in Vietnam. Content analysis method according to GRI guidelines is used to measure the level of the environmental responsibility practice and Easton’s model (2004) is used to estimate firms’ ex ante cost of equity. The research results show that the level of environmental information disclosure of listed companies in Vietnam is not high and there is a negative relationship with statistical significance between the environmental disclosure and cost of equity of listed companies in Vietnam. The findings suggest that environmental practice can be profitable and beneficial to Vietnamese listed companies. Therefore, companies in Vietnam need to change their awareness of social and environmental responsibility practices. This study also shows that the suitable model for listed companies in Vietnam is the FEM.
Highlights
Sustainable development is an indispensable development trend of modern society, because sustainable development meets the needs of the present, and ensures the needs of the future
We chose the companies which disclosure often focuses on two directions: the have a Vietnamese annual report of a listed non-financial comenvironmental disclosure with typical research panies with sufficient information on the indicaof Trinh Hiep Thien (2010), Hoang Thuy Dieu tors which need to be collected
Regression model of equity compared to other companies, but the effect of implementing social and environmental The research uses panel data regression model to responsibility in reducing cost of equity of state- assess the impact of environmental disclosure to owned companies is inferior
Summary
Sustainable development is an indispensable development trend of modern society, because sustainable development meets the needs of the present, and ensures the needs of the future. This study was conducted to review and assess the level of environmental disclosure, determine the impact of environmental disclosure on the cost of equity of listed companies on the Vietnamese stock market. In terms of research space, and cost of equity According to these authors, these studies were conducted in many countries, three reasons can justify such an effect: (i) some focusing mainly on developed countries (USA, companies disclosure social and environmental Canada, Australia), and emerging economies reinformation, but they did not really comply to cently, especially China. We chose the companies which disclosure often focuses on two directions: the have a Vietnamese annual report (including fifirst direction is to study the factors affecting the nancial statements) of a listed non-financial comenvironmental disclosure with typical research panies with sufficient information on the indicaof Trinh Hiep Thien (2010), Hoang Thuy Dieu tors which need to be collected.
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