The price of environmental, social and governance practice disclosure: An experiment with professional private equity investors
This paper sheds light on the impact that environmental, social and governance (ESG) corporate practice disclosure has on equity financing. We present a unique framed field experiment in which professional private equity investors competed in closed auctions to acquire fictive firms. We hence observe that corporate non-financial (ESG) performance disclosure impacts firm valuation and investment decision and we quantify to which extent. Main result is an asymmetric effect, investors reacting more to bad ESG practice disclosure than to good ESG ones. Our findings are discussed in terms of practical implications for both investors and firm managers.
Year of publication: |
2015
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Authors: | Crifo, Patricia ; Forget, Vanina D. ; Teyssier, Sabrina |
Published in: |
Journal of Corporate Finance. - Elsevier, ISSN 0929-1199. - Vol. 30.2015, C, p. 168-194
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Publisher: |
Elsevier |
Subject: | Corporate finance | Corporate social responsibility | Field experiment | Firm valuation | Private equity |
Saved in:
Online Resource