Sustainability-related disclosure rules and financial market indicators: Searching for interconnections in developed and developing countries

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In today’s fast-paced business environment, integrating sustainability into financial decision-making has been a key driver of change. As stakeholders increasingly demand greater corporate transparency and accountability, regulatory bodies have stepped in to ensure that sustainability reporting is standardized and robust. This paper aims to establish the relationship between the sustainability-related disclosure rules and the dynamic indicators of the financial market. The object of the study is 74 countries of the world, which are grouped into developed and developing countries. The time period is 2021, for the stock market capitalization indicators – 2020, as the most recent years with available data. The research methods are normality tests (Shapiro-Wilk and Shapiro-Francia test), comparison methods (Student’s t-test and Mann-Whitney U test, regression analysis with dummy variables), linear and non-linear correlation and regression analysis (logarithmic, polynomial). The results obtained confirmed that the sustainability-related disclosure rules are higher in developed countries than in developing ones. At the same time, in developed countries, the growth of such requirements affects the increase in stock price volatility, stock market capitalization, foreign direct and portfolio investments. For developing countries, there is also an increase in the stock market capitalization, portfolio investments and the volume of stock trading. Recognizing these trends can benefit both financial market regulators and participants to encourage the formation of a transparent and efficient financial market, thereby mitigating the problems associated with information asymmetry.

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    • Table 1. Characteristics of the input data
    • Table 2. Research methodology
    • Table 3. Results of statistical tests to test hypothesis Н1
    • Table 4. Results of regression analysis with dummy variables to test hypothesis Н1
    • Table 5. Results of correlation and regression analysis to test hypothesis Н2
    • Table 6. Results of correlation and regression analysis to test hypothesis Н3
    • Table 7. Results of correlation and regression analysis to test hypothesis Н5
    • Table 8. Results of correlation and regression analysis to test hypothesis Н6
    • Table 9. Results of correlation and regression analysis to test hypothesis Н7
    • Table 10. Results of testing research hypotheses
    • Table A1. Groups of countries analyzed in this study by markets and economic growth
    • Conceptualization
      Inna Makarenko, Anna Vorontsova, Mykola Gorodysky
    • Methodology
      Inna Makarenko, Anna Vorontsova
    • Writing – original draft
      Inna Makarenko, Anna Vorontsova, Larysa Sergiienko, Iryna Hrabchuk
    • Writing – review & editing
      Inna Makarenko, Anna Vorontsova
    • Data curation
      Larysa Sergiienko
    • Resources
      Larysa Sergiienko
    • Software
      Larysa Sergiienko, Mykola Gorodysky
    • Supervision
      Larysa Sergiienko
    • Investigation
      Iryna Hrabchuk
    • Project administration
      Iryna Hrabchuk
    • Formal Analysis
      Mykola Gorodysky
    • Validation
      Mykola Gorodysky
    • Visualization
      Mykola Gorodysky