The impact of the form of non-financial reporting on market capitalization of Russia’s and foreign companies

Abstract

The publication of non-financial reporting has gained a wide popularity among the transnational corporations and the largest national companies over the past 20 years. The authors argue that for companies aiming to achieve the leading positions it is crucial to demonstrate an active social, environmental, and educational position, disclosing information on non-financial aspects in appropriate reporting forms. An increasing number of studies is focused on exploring the impact of non-financial factors on companies’ efficiency, strengthening their competitiveness. Nevertheless, not all aspects have been identified, the industry aspects of the issue have not been sufficiently studied, with a small number of publications aimed at studying the ESG-transformation of the Russian companies. The purpose of the article is to identify the correlation between the number of pages and languages of non-financial reporting on market capitalization of the Russian and foreign companies with regression analysis as a methodological basis of the study. The findings demonstrate the correlation between the form of presentation of non-financial information and a financial indicator of company's performance such as market capitalization. More concise information on company results, aspects of development strategy, the degree of impact on the environment and society has a positive effect on market capitalization of companies. The authors argue that the companies with the largest market capitalization generate non-financial reports only in English. The study identifies similar patterns for Russian and foreign companies.