The value relevance of quantitative and qualitative environmental disclosure of polluting companies in India: a static and dynamic panel data evidence

This paper examines the value relevance of quantitative and qualitative environmental disclosure of 145 polluting companies' in India. Environmental disclosure is measured by a checklist of items based on Global Reporting Initiative guidelines as well as environmental regulations prevailing in India. Subsequently, the disclosure scores are drawn individually by using content analysis of annual reports for a period of nine years, i.e., from 2009-2010 to 2017-2018. Employing static and dynamic panel data regression method, the study finds both quantitative as well as qualitative environmental disclosure plays an important role in enhancing the market value and allows the firm to differentiate it from others. Further, the study finds investment in research and development (R&D) has a positive impact on the financial performance of a company. However, the study finds a negative association between the interaction effect of R&D expenditure with environmental disclosure and the financial performance of a firm.