Corporate sustainability performance in the emerging market of Turkey: the role of accounting information quality and firm risk

Abstract

Purpose

The purpose of this study is to investigate the effect of accounting information quality (AIQ) and firm risk on the corporate sustainability performance (CSP) of Turkish listed firms.

Design/methodology/approach

This study used data of 70 firms listed on Istanbul Stock Exchange during the period 2014–2019. Binary and ordinal logistic regression models are used to examine the factors affecting CSP as proxied by the membership to BIST Sustainability Index.

Findings

The results of this research indicate that AIQ is negatively related to CSP in firms with severe agency problem. The results also show a significant negative relationship between accounting earnings volatility and CSP. However, the effect of stock return volatility on CSP is not significant. Furthermore, the findings reveal that the possibility of being a member of Turkish sustainability index is higher for larger firms, firms that are included in BIST Corporate Governance Index and firms with high leverage, more research and development (R&D) intensity and high brand value.

Practical implications

The results of this study provide implications for policymakers, investors and firms about the role of firm characteristics in determining CSP.

Originality/value

To the author's knowledge, this study is the first to explore the effect of AIQ and firm risk on CSP in the Turkish context.

Citation

Kalash, I. (2023), "Corporate sustainability performance in the emerging market of Turkey: the role of accounting information quality and firm risk", Journal of Economic and Administrative Sciences, Vol. 39 No. 1, pp. 78-99. https://doi.org/10.1108/JEAS-12-2020-0201