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Community and environment disclosures and IPO long-run share price performance

Yasir Abdullah Abbas (Department of Management and Marketing of Oil and Gas, College of Industrial Management for Oil and Gas, Basrah University for Oil and Gas, Basrah, Iraq)
Nurwati A. Ahmad-Zaluki (Othman Yeop Abdullah Graduate School of Business (OYAGSB), Universiti Utara Malaysia, Kuala Lumpur, Malaysia)
Waqas Mehmood (School of Accounting and Finance, Taylor’s University, Subang Jaya, Malaysia)

Journal of Financial Reporting and Accounting

ISSN: 1985-2517

Article publication date: 29 March 2023

3066

Abstract

Purpose

This paper aims to examine the relationship between the community and environment disclosures and the long-run share price performance of Malaysian initial public offering (IPO) companies.

Design/methodology/approach

This study used secondary data through the content analysis of the annual reports and DataStream of 115 sampled IPOs listed on Bursa Malaysia from 2007 to 2015. The present study incorporated weighted least squares and quantile least squares to evaluate the relationship between the community and environment disclosures and IPO performance.

Findings

The results show a positive and significant relationship between the extent and quality of community disclosures and IPO performance; while the extent and quality of environment disclosures have a negative and positive relationship, respectively, with IPO performance. These results suggest that community and environmental activities can be considered an effort to enhance Malaysian IPOs.

Practical implications

These results suggest that Malaysian IPO companies should be involved consistently in corporate social responsibility disclosure, i.e. community and environmental activities, as they have a significant impact on the performance of Malaysian IPOs. The findings can facilitate financial institutions and regulatory agencies in driving companies to be more responsible regarding community and environmental disclosures.

Originality/value

To the best of the authors’ knowledge, this study provides new insights into the relationship between the community and environment disclosures and the performance of Malaysian IPO companies.

Keywords

Acknowledgements

The authors are grateful to the anonymous referees of the journal for their extremely useful suggestions to improve the quality of the paper.

Citation

Abbas, Y.A., Ahmad-Zaluki, N.A. and Mehmood, W. (2023), "Community and environment disclosures and IPO long-run share price performance", Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-07-2022-0244

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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