Corporate Disclosure Scores and Share Price Reaction: Empirical Study of Indian Listed Firms (Post Satyam Period)

Abstract

The study examined the effect of corporate governance disclosures and collectively environment social and governance disclosures on the share price of listed Indian firms. Data regarding the sample of 393 companies of CNX 500 index of NSE of India was collected from Bloomberg data base by using two regressions equations for CGD and ESGD using both separately independent variables and share price as dependent variable. The study period was deliberately taken as post Satyam collapse period ranging from 2009-2014. The results obtained from the study were contradictory with the prior empirical results of developed countries and revealing that there is weak positive relationship between CGD and ESGD with the share price of sample firms and there is very minimal impact of  CGD and ESGD on the share price of sample firms. Thus putting a question mark on negative signal that stake holders especially investors are very less sensitive towards the CGD and ESGD and are reacting only towards accounting information for material benefits rather than protection of social cost,  protection of minority interest and environment sustainability development.  Like another studies there is also possibility of further contribution to the present research.

Keywords: Corporate Governance Disclosures, Environmental social and Governance Disclosures, Share price, social cost, sustainability development