Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 52, No. 6, pp.1355-1381
ISSN: 1226-1874 (Print)
Print publication date 31 Dec 2023
Received 10 Oct 2023 Accepted 06 Nov 2023
DOI: https://doi.org/10.17287/kmr.2023.52.6.1355

ESG보고서의 신뢰성 향상 메커니즘과 자본시장 반응: 기업지배구조와 외부검증의 결합 효과

Keun-Hyo Yook ; Mi-Hwa Choi ; Su-Jeon Ryu
(First Author) Busan University of Foreign Studies yook@bufs.ac.kr
(Corresponding Author) Busan University of Foreign Studies choimh@bufs.ac.kr
(Co-Author) Pusan National University soojeon@pusan.ac.kr
Credibility Enhancing Mechanisms of ESG Reports and Capital Market Response: Combination of Corporate Governance and External Assurance


Copyright 2023 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This study examines the comprehensive effects of internal and external corporate governance mechanisms on the capital market response to corporate ESG reports. Based on a sample of 342 firm-year observations from the period 2016–2021, the study tested direct and bundling effects of internal governance and external assurance mechanisms on the capital market. The main empirical findings are as follows: (i) CEO duality, sustainability committee, and double assurance (third-party assurance with greenhouse gas emission certificate), have a direct and significant impact on cost of debt (negative) and Tobin_Q (positive); (ii) there are complementarities between the CEO duality and sustainability committee, Big4 assurance and the CEO duality, Big4 assurance and double assurance, enhancing the effect of debt financing. On the other hand, CEO duality and external assurance, as well as Big4 assurance and double assurance, show positive response in the capital market (Tobin_Q). However, the existence of a sustainability committee did not have a synergistic effect with any other variables. Finally, the combined effect of reliability enhancing mechanisms is slightly greater for companies issuing sustainability reports than for companies issuing integrated reports.

Keywords:

credibility enhancing mechanism, ESG Reports, third-party assurance, corporate governance, BIG4 assurance

Acknowledgments

This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea(NRF-2021S1A5A2A01067418)

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∙ The author Keun-Hyo Yook is currently a professor of Division of Business Administration, Busan University of Foreign Studies. He received master’s degree from Pusan National University and master’s degree in economics from PuKyong National University, and Ph.D. in business administration from Dong-A University. He has served as a visiting professor at Kobe University, Yokohama National University, Osaka Prefectural University in Japan, and Akron University, USA. The author’s main research areas are target cost management, strategic management accounting, environmental accounting, and ESG management.

∙ The author Mi-Hwa Choi is currently a professor of Division of Business Administration, Busan University of Foreign Studies. She received her Ph. D. in business administration from Busan National University. She served as a visiting professor at the Akron University, USA. The author’s main research areas are ESG management, valuation, accounting education, and Edutech.

∙ The author Su-Jeon Ryu is currently a lecturer in the Department of Business Administration, Kyungsung University. She received her Ph. D. in the Department of Business Administration from Pusan National University. The author’s main research areas are management accounting, executive compensation, and CSR.