Purpose This study aims to extend the sustainable development goals (SDG) disclosure literature by examining the influence of natural resource-based view (NRBV) strategic capabilities, namely pollution prevention, green product innovation and environmental certification, on SDG disclosure practices among Indonesian companies. It also investigates the association between this disclosure and financial performance. Design/methodology/approach This study uses Indonesian companies listed in Indonesia Stock Exchange (IDX) for the period 2021 to 2024, comprising 1,256 company-year observations from 314 companies. All data for the variables are collected from annual and sustainability reports and analyzed using panel regression. Findings This study demonstrates that NRBV-based strategic capabilities, such as pollution prevention, green product innovation and environmental certification, significantly enhance companies' SDG disclosure. However, such disclosure is associated with lower financial performance due to the substantial costs required to support SDG-related activities. Practical implications The findings of this study provide practical implications for regulators as the commitment for achieving the SDG can be actualized through stricter sustainability regulations. It can be used to encourage companies to integrate strategic capabilities provided by NRBV into business operations. Originality/value This study extends the existing literature on SDG disclosure by shifting the focus from commonly examined governance and ownership determinants to the role of NRBV's strategic capabilities. It further contributes by examining the implications of SDG disclosure for companies' financial performance within an emerging market country context like Indonesia. This study also provides complementary evidence to prior studies predominantly conducted in developed countries.
Purpose Bankruptcy system reform is an effective measure to improve judicial efficiency in bankruptcy proceedings and protect the legitimate rights and interests of creditors. It plays an important role in promoting the development of credit markets. Design/methodology/approach Based on a quasi-natural experiment of establishing bankruptcy court in China, this paper examines the impact of the establishment of bankruptcy court on shadow banking activities of non-financial enterprises, using a multi-period difference-in-differences model with China's A-share listed enterprises as the research object from 2016 to 2022. Findings The findings show that the establishment of bankruptcy court increases the scale of shadow banking activities of non-financial enterprises. Furthermore, enhancing creditor protection and increasing management risk preference play important mechanism effect. Bankruptcy law enforcement efficiency demonstrates a strong moderating effect. Originality/value This study provides empirical evidence for evaluating the quality and effectiveness of bankruptcy system reform and offers instructive insights for activating informal finance, regulating shadow banking activities and maintaining financial market stability.
Purpose Political connections introduce significant uncertainty in emerging markets and may shape firms' risk profiles by weakening market discipline and governance mechanisms. This study examines the association between political connections and earnings volatility in the Indian context. Additionally, it examines whether short-term debt can act as a moderator in mitigating the risk associated with political connections by reinforcing financial discipline and external monitoring. Design/methodology/approach Using an unbalanced panel of NSE-listed firms from 2009 to 2024, the study employs pooled ordinary least squares (OLS). The political connection is measured using a dual-channel approach, comprising both the promoter's channel and the donation channel. The political connection dataset for Indian firms was compiled from Election Commission of India contribution reports and the companies' annual reports. The results exhibit robustness to endogeneity concerns, which are addressed through instrumental variable estimation and a range of robustness tests. Findings The major findings of the study indicate that a firm with a political connection is positively and significantly associated with earnings volatility, suggesting that political connection exposes the firm to policy uncertainty, rent-seeking pressure and managerial opportunism. Short-term debt (STD) is found to reduce earnings volatility and negatively moderates the relationship between political connection and earnings volatility. This finding suggests that STD as an external governance by enhancing regular creditor monitoring. These findings align with agency theory and remain robust across alternative measures and endogeneity correction. Originality/value This study contributes to the literature by providing evidence on the risk implications of political connections in an emerging market setting and by highlighting the moderating role of STD in shaping earnings volatility in politically connected firms. The findings underscore the importance of debt maturity structure as an external governance mechanism in environments characterised by political influence.
Purpose This paper investigates the associations of ex-bureaucrats and ex-politicians serving on bank boards with financial reporting quality using a sample of Turkish banks over the period 2007–2022. Design/methodology/approach We mainly perform ordinary least squares and logistic regressions to test our hypothesis and address the research question. To mitigate selection bias and endogeneity problems, we perform the Heckman two-stage selection model and system GMM procedures. To mitigate the omitted variable bias, we use a fixed effects estimator. Additionally, we constructed an alternative sample by excluding ex-bureaucrats without professional experience in accounting, finance, taxation, or other relevant fields. Finally, we created interaction terms using the ex-bureaucrat and ex-politician variables. Findings The findings indicate that ex-bureaucrat directors are associated with higher financial reporting quality, particularly through lower discretionary loan loss provisions, whereas ex-politician directors exhibit no consistent association with financial reporting quality. Additional analyses provide robust support for the discretionary loan loss provision results. However, the evidence for small-profit reporting is less robust, particularly in the bank fixed-effects estimations. Furthermore, the results remain robust when ex-bureaucrats whose public sector careers were unrelated to accounting, finance, or related fields are excluded. This finding suggests that the documented association is more closely linked to the relevant expertise accumulated during bureaucratic careers than to bureaucratic status per se. Originality/value This study contributes to the literature by showing that the association between ex-bureaucrats and bank financial reporting quality appears to depend on the relevant expertise accumulated during their public sector careers, rather than on bureaucratic background per se. It also offers novel evidence on the heterogeneous implications of different forms of government experience for bank financial reporting quality.
