Is the disclosure of non-financial information, such as that related to environmental, social, and governance (ESG), important for firm performance in emerging markets? Does the extent of information asymmetries affect the way stock market participants react towards ESG disclosure? This paper answers these questions and shows that ESG disclosure is negatively related to firm performance in environments with lower information asymmetries. We argue that this negative relationship exists because ESG activities are considered as unrelated costs that reduce shareholders profits and wealth. Our results also show no significant impact of ESG disclosure on firm performance in environments with higher information asymmetries. Given that information is less reliable in environments with lower information asymmetries, it is very much possible that ESG disclosure is not valued by stock market participants.

Purpose: – The purpose of this paper is to document the relationship between intellectual capital disclosure and analyst following for biotechnology firms listed on the Copenhagen Stock Exchange between 2001 and 2010.Design/methodology/approach: – Intellectual capital disclosure was computed from financial statements applying the disclosure index of Bukhet al.(2005), while analyst following data were retrieved from the Institutional Brokers’ Estimate System (I/B/E/S).Findings: – The results show that analysts are more likely to follow firms with high intellectual capital disclosure. This finding suggests that analysts wish to follow those firms for which they have more information. The results also show that the most important intellectual capital disclosures for analysts are those related to employees and strategic statements. This paper therefore expands on previous results by raising awareness of which information companies should disclose to the capital market in order to improve analyst following, in turn helping to improve the general disclosure environment.Research limitations/implications: – More relevant methods, such as surveys or interviews with management, could be used to improve the information content of intellectual capital disclosure. Analysts probably deduce the intellectual capital of a firm from interaction with management rather than financial statements.Practical implications: – Firms in and beyond the biotechnology sector can improve their information environment by disclosing more information on intellectual capital in relation to employees and strategic statements in their financial statements.Originality/value: – The findings shed light on the importance of understanding intellectual capital in the biotechnology sector for analysts and investors who wish to value such firms.

Purpose: This paper aims to document whether firms with audited financial statements pay lower bribes to get contracts than firms without audited financial statements. In other words, this study assesses whether external auditing helps combat corruption.Design/methodology/approach: The World Bank Enterprise Survey data covering the period between 2006 and 2014 is used. The total sample comprised more than 50,000 firms in 126 countries.Findings: This paper finds that firms with audited financial statements pay significantly lower bribes compared to firms with unaudited financial statements. The results are robust across various estimation procedures, various proxies for bribery and various sub-samples. It is also found that the relationship between audited financial statements and bribery is more pronounced in environments where firms face higher pressure to engage in corrupt practices.Practical implications: The results imply that auditing of financial statements can act as a disciplining device to curb bribery in environments that encourage corruption.Originality/value: This paper is the first attempt, according to the authors’ knowledge, to examine the relationship between external auditing and corruption using firm-level data that cover 126 countries and is gathered over a 14-year period. Therefore, the results derived from this study are generalizable.

Purpose: The purpose of this paper is to document how male and female managers respond to competition posed by informal firms.Design/methodology/approach: The methodology uses the ordered logistic regression and the data provided by the World Bank’s Enterprise Survey to test the arguments for firms headquartered in India.Findings: The findings show that firms managed by females are more likely to consider informal competition as a bigger obstacle for their operations than firms managed by males. It also shows that this relationship is more pronounced in provinces with weak institutional infrastructure. Lastly, the paper shows that firms managed by females respond to competition from the informal sector by undertaking more innovations than firms managed by males.Originality/value: This research extends the literature on gender differences in response to competition by documenting how female managers respond to external competition in emerging markets.