The purpose of this study is to examine the relationship between foreign investors and voluntary disclosure. Focusing on voluntary disclosure of carbon emissions information and using South Korean firms from 2014 to 2019, we found that foreign investors are likely to voluntarily release information on carbon emissions. Thus, foreign investors play a role in controlling the information gap in a capital market. We also discuss the effect of environmental, social, and governance activities on the relationship between foreign investors and voluntary disclosure. We infer that the analysis result shows that foreign investors motivate firms to improve the environment to prepare for future environmental risks. Our study also suggests solving environmental problems actively, such as responding to climate change, by presenting a direction for policymaking on sustainable management.

The purpose of this study is to examine the relationship between the voluntary disclosure of carbon emissions and firm value. In addition, we examine whether the human resources of the internal control system affect the relationship between the voluntary disclosure of carbon emissions and firm value with data from the Korean stock market from 2014 to 2019. This study shows that the firms that voluntarily disclose information on carbon emissions increase their value. Additionally, the sufficient number and working experience of internal control personnel in each accounting, financing, and information technology department positively affects the relationship between voluntary disclosure and firm value. We additionally find an effect of the awareness level on climate change on firm value. That is, firms that are active on climate change rather than merely disclosing information. Finally, we find the positive role of Environment, Social and Governance (ESG), implying a superior management environment that leads to better disclosure practices.

This study examines the relationship between CEO overconfidence, environment, social, and governance investments, and firm value. Drawing on insights from upper echelon and agency theory, greater female representation on boards is expected to act as an independent monitoring mechanism to control and reconcile CEO overconfidence which leads to enhancement of corporate value induced by environment, social, and governance investments. Empirical evidence in this study finds that, on average, overconfident managers tend to engage in ESG investments in South Korea. Furthermore, in firms with high environment, social, and governance investments, the negative association between CEO overconfidence and firm value is mitigated, showing that environment, social, and governance investments are effective moderators in controlling and constraining managerial overconfidence. Finally, we find that the joint impact of CEO overconfidence and environment, social, and governance investments on corporate value is distinctive in firms with female board representation. Taken together, we find that negative effects associated with CEO overconfidence can be alleviated by the role of female leadership that links corporate environment, social, and governance investments to firm value.

This study examined the relationship between ESGs and the audit hours of 3010 Korean stock-listed firms from 2014 to 2019. The Korean Corporate Governance Service assigns ratings to each firm based on ESG performance. We discover that auditors exert more effort auditing companies that prioritize ESGs. Additionally, we evaluated whether the CEO’s competency level influences the relationship between ESGs and the total amount of time spent auditing the company. We observed that auditors spend less time auditing companies with highly competent CEOs. We disaggregated the total number of audit hours by rank and verified each audit hour completed by partners, CPAs, as well as staff. Based on our research, we conclude that a firm’s ESG increases audit complexity, and increases the amount of effort exerted in the auditing process.

The purpose of this paper is to examine the association between corporate environmental responsibility (CER) activities and investment efficiency as measured by overinvestment, and whether the industry-level competition affects this association. We investigate a sample of 2285 non-financial firms with fiscal year-end in December listed in the Korea Stock Exchange Market for the period of 2013–2018, measuring the investment efficiency by overinvestment model. Using environmental scores from the Korea Corporate Governance Service to measure CER activities, we show that, on average, firms can decrease overinvestment behavior through CER activities in South Korea. Moreover, in firms in a highly competitive market, the negative association between CER activities and overinvestment is pronounced, indicating that strong product market competition are effective in monitoring managerial opportunistic behavior. These results are robust, even after controlling for different setting and alternative CER. These findings also suggest that the relationship between CER and overinvestment appears to be benefit firms that are sound and sustainable and honestly present their financial information.