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Sustainability reporting and corporate financial performance of IPOs: witnessing emerging market

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Abstract

The objective of this paper is to investigate the impact of sustainability reporting (SR) quality on the corporate financial performance (CFP) of initial public offering (IPO) in Malaysia. This research applies the OLS and WLS regressions through content analysis of annual reports. The data was collected from Datastream, where 131 IPOs listed companies on Bursa Malaysia between 2007 and 2017. The findings indicate a positive and negative association between SR and its components with CFP. It is found that there is a negative and significant association between the SR characteristics of employees and products with CFP. However, it was discovered that the societal and environmental components have a significantly positive association with CFP. This finding shows that SR practices might be seen as an attempt to enhance IPO performance. The findings can facilitate financial institutions and regulatory agencies in driving responsibility on the part of companies regarding SR issues. The firms should involve SR practices in their SR decisions. Thus, this study emphasises the significance of combining social and organisational activities.

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Acknowledgements

The authors are grateful to the anonymous referees of the journal for their extremely useful suggestions to improve the quality of the paper.

Funding

This study is supported via funding from the Prince Sattam bin Abdulaziz University project number (PSAU/2023/R/1444).

Author information

Authors and Affiliations

  1. Department of Management and Marketing of Oil and Gas, College of Industrial Management for Oil and Gas, Basrah University for Oil and Gas, Basrah, Iraq

    Yasir Abdullah Abbas

  2. School of Accounting and Finance, Faculty of Business and Law, Taylor’s University, Subang Jaya, Malaysia

    Waqas Mehmood

  3. Department of Management, College of Business Administration, Prince Sattam Bin Abdulaziz University, Al-Kharj, 11942, Saudi Arabia

    Anis Ali

  4. Faculty of Management Sciences, Preston University Islamabad, Islamabad, Pakistan

    Attia Aman-Ullah

Authors
  1. Yasir Abdullah Abbas
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  2. Waqas Mehmood
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  4. Attia Aman-Ullah
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Contributions

Yasir Abdullah Abbas: writing original draft and analysis.

Waqas Mehmood: review.

Anis Ali: review and edit.

Attia Aman-Ullah: review and edit.

Corresponding author

Correspondence to Waqas Mehmood.

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Appendix. List of SR items

Appendix. List of SR items

Theme I-society-SR items

1

Donations program

2

Educational program

3

Health projects

4

Development society programs and activities

5

Sports program

6

Charity program

Theme II-environmental-SR items

1

Pollution control

2

Conservation of natural resources

3

Award for environmental programs

4

Waste management

5

Water management

6

Renewable energy

Theme III-employee-SR items

1

Employee health and safety

2

Employee trainings

3

Safety award

4

Improve employee working conditions

5

Employees awards

6

Employee welfare fund

Theme IV-product-SR items

1

Products development

2

Product safety

3

Green product

4

Product quality

5

Product awards

6

Consumer satisfaction

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Abbas, Y.A., Mehmood, W., Ali, A. et al. Sustainability reporting and corporate financial performance of IPOs: witnessing emerging market. Environ Sci Pollut Res 30, 85508–85519 (2023). https://doi.org/10.1007/s11356-023-28446-4

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