Do sustainability disclosure mechanisms reduce market myopia? Evidence from European sustainability companies

Río Solano, María Cristina del; López Arceiz, Francisco José; Muga Caperos, Luis Fernando

Publication:
Do sustainability disclosure mechanisms reduce market myopia? Evidence from European sustainability companies

dc.contributor.author	Río Solano, María Cristina del
dc.contributor.author	López Arceiz, Francisco José
dc.contributor.author	Muga Caperos, Luis Fernando
dc.contributor.department	Institute for Advanced Research in Business and Economics - INARBE	en
dc.contributor.funder	Universidad Pública de Navarra / Nafarroako Unibertsitate Publikoa	es
dc.date.accessioned	2023-03-16T08:25:53Z
dc.date.available	2023-03-16T08:25:53Z
dc.date.issued	2023
dc.date.updated	2023-03-15T10:31:45Z
dc.description.abstract	Market myopia is a behavioural bias that causes investors to overvalue short-term earnings and undervalue long-term profits. This anomaly should not be compatible with sustainability disclosure mechanisms, the set of tools which firms use for reporting on their sustainable practices, and which contribute towards long-term performance improvements. Our aim is to study whether market myopia, as a symptom of market inefficiency, decreases with the implementation of sustainability disclosure mechanisms. We test for the presence of market myopia in a sample of firms listed on the S&P Europe 350 Index. For this purpose, we propose to use an adaptation of the valuation model for residual income under linear information dynamics developed by Felthan and Ohlson. Using the rating provided by RobecoSAM Sustainability Yearbook, we find market myopia to be less prevalent in companies classified as high sustainability reporters. An association is also found between persistent enforcement of sustainability disclosure mechanisms and a reduction of the market myopia effect.	en
dc.description.sponsorship	Grant PID2019- 104304GB-I00 funded by MCIN/AEI/ 10.13039/501100011033 and grant TED2021-131216B-I00 funded by MCIN/AEI/10.130 39/501100011033 and European Union “NextGenerationEU”/PRTR. Open access funding provided by Universidad Pública de Navarra.	en
dc.format.mimetype	application/pdf	en
dc.identifier.citation	Del-Río, C., López-Arceiz, F. J., Muga, L. (2023) Do sustainability disclosure mechanisms reduce market myopia? Evidence from European sustainability companies. International Review of Financial Analysis, 87, 1-14. https://doi.org/10.1016/j.irfa.2023.102600.	en
dc.identifier.doi	10.1016/j.irfa.2023.102600
dc.identifier.issn	1057-5219
dc.identifier.uri	https://academica-e.unavarra.es/handle/2454/44919
dc.language.iso	eng	en
dc.publisher	Elsevier	en
dc.relation.ispartof	International Review of Financial Analysis 87 (2023 ) 1-14	en
dc.relation.projectID	info:eu-repo/grantAgreement/AEI/Plan Estatal de Investigación Científica y Técnica y de Innovación 2017-2020/PID2019-104304GB-I00/ES/	en
dc.relation.projectID	info:eu-repo/grantAgreement/AEI/Plan Estatal de Investigación Científica y Técnica y de Innovación 2021-2023/TED2021-131216B-I00	en
dc.relation.publisherversion	https://doi.org/10.1016/j.irfa.2023.102600
dc.rights	© 2023 The Authors. This is an open access article under the CC BY-NC-ND license.	en
dc.rights.accessRights	info:eu-repo/semantics/openAccess
dc.rights.uri	http://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subject	Sustainability disclosure	en
dc.subject	Market myopia	en
dc.subject	Corporate sustainability	en
dc.title	Do sustainability disclosure mechanisms reduce market myopia? Evidence from European sustainability companies	en
dc.type	info:eu-repo/semantics/article
dc.type.version	Versión publicada / Argitaratu den bertsioa	es
dc.type.version	info:eu-repo/semantics/publishedVersion	en
dspace.entity.type	Publication
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