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Corporate Social Responsibility: Motives and Financial Performance
Article

The Impact of Environmental Sustainability Disclosure on Stock Return of Saudi Listed Firms: The Moderating Role of Financial Constraints

Department of Finance, School of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia
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Int. J. Financial Stud. 2021, 9(1), 4; https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010004
Received: 15 November 2020 / Revised: 25 December 2020 / Accepted: 29 December 2020 / Published: 5 January 2021
(This article belongs to the Special Issue Corporate Social Responsibilities)
Environmental sustainability represents nowadays a significant factor for business sector. Firms carry out many initiatives to develop environmental practices. Investors increasingly consider environmental discloser by firms and integrate this disclosure into the investment decision-making process. Using a database of Saudi listed firms, this study adds to the literature by examining the relationship between the environmental sustainability disclosure and stock return and whether this relationship is moderated by the financial constraints. We find that the environmental sustainability disclosure has significant and negative impact on stock return, indicating that investors do not consider environmental disclosure when valuing the stocks. Furthermore, our results propose that the negative impact of environmental disclosure on stock return is more evident in firms with financial constraints. This study provides managerial implications for regulatory authorities, firms and investors. The environmental practices can be value relevant. However, these practices need to be efficiently integrated into stock valuation. View Full-Text
Keywords: stock return; environmental sustainability disclosure; financial constraints; Saudi Arabia stock return; environmental sustainability disclosure; financial constraints; Saudi Arabia
MDPI and ACS Style

Alsahlawi, A.M.; Chebbi, K.; Ammer, M.A. The Impact of Environmental Sustainability Disclosure on Stock Return of Saudi Listed Firms: The Moderating Role of Financial Constraints. Int. J. Financial Stud. 2021, 9, 4. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010004

AMA Style

Alsahlawi AM, Chebbi K, Ammer MA. The Impact of Environmental Sustainability Disclosure on Stock Return of Saudi Listed Firms: The Moderating Role of Financial Constraints. International Journal of Financial Studies. 2021; 9(1):4. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010004

Chicago/Turabian Style

Alsahlawi, Abdulaziz M., Kaouther Chebbi, and Mohammed A. Ammer 2021. "The Impact of Environmental Sustainability Disclosure on Stock Return of Saudi Listed Firms: The Moderating Role of Financial Constraints" International Journal of Financial Studies 9, no. 1: 4. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010004

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