The study examines the determinants of the quality of carbon reporting (QCR) by top listed firms of a developed country. Using a sample of the top 50 listed firms of New Zealand (NZ) sampled over a period of 6 years (2015–2020), the study measured QCR index using 14‐items and analysed the data using regression analysis. The study finds that external factors, namely, carbon regulation (Emission Trading Scheme—ETS law), use of a standardised reporting format for non‐financial reporting (Global Reporting Initiative, GRI) template, and environmental and social (E&S) performance, all positively influence the QCR. The study also finds that corporate governance attributes namely board diversity (women's representation on the board) and board size positively influence the QCR. Lastly, the study finds that top firms in NZ have many areas of improvement in reporting quality carbon information. The study is the first empirical research on QCR from NZ firms that evidences multiple institutional factors and governance elements as key explanatory factors driving towards making carbon reporting credible and reliable.

A large number of studies have investigated the relationship between financial constraints and firm performance. However, due to heterogeneity in study design factors, such as choice of measures for constraints and performance, control variables, estimation methods and study sample, the empirical results have been mixed. To mitigate this issue, this paper reports a meta‐analysis of the association between financial constraints and firm performance. To assess the overall direction of the relationship and the sources of heterogeneity, we apply meta‐analytic methods to 26 studies (providing 189 effect sizes) on the association between financial constraints and financial performance in listed companies. Our result shows that, overall, there is a positive relationship between financial constraints and firm performance. In addition, meta‐regression results suggest that return on assets (ROA) and return on equity (ROE) as measures of financial performance, and external finance and size as measures of financial constraints, have a significant negative impact on the relationship between financial constraints and firm performance relative to the mean impact on effect size. Similarly, all of North America and Asia as regional differences, control of size and corporate governance as control variables, and journal quality as strength of results, also have a significant negative impact. On the other hand, market value as a measure of financial performance, and the Whited & Wu index as a measure of financial constraints, have significant positive impact relative to the mean impact. Similarly, cross‐country and Europe as regional differences, and publication status as strength of results, all have significant positive impact. Given that firm performance is of fundamental importance to investors, this study therefore helps researchers and policymakers to understand the variation in the empirical results on the impact of financial constraints.

Carbon emissions and agency costs can have an impact on firms’ financial performance. However, limited attention has been paid to the combined and gradual effects of these two factors on firms’ performance. We explore the separate and combined effects of carbon emissions and agency costs on firms’ financial performance by utilizing data from 2323 US firms that disclosed their environmental information to CDP from 2007 to 2016. The results indicate that firms with higher carbon emissions experience lower performance as the market reacts negatively. Further, firms with both higher carbon emissions and higher agency costs have lower performance. We also investigated year-on-year change in firm performance and found that, keeping agency costs constant, a change in carbon emissions leads to lower performance. Overall, the findings suggest that when the market responds negatively to firms’ environmental decisions, high agency costs exacerbate the adverse effect of high carbon emissions on firm performance.