Title: Firm financial performance and sustainability reporting: the role of institutional investors' ownership

Authors: Hafizah Abd-Mutalib; Nor Atikah Shafai

Addresses: Tunku Puteri Intan Safinaz School of Accountancy, College of Business, Universiti Utara Malaysia, Malaysia ' Tunku Puteri Intan Safinaz School of Accountancy, College of Business, Universiti Utara Malaysia, Malaysia

Abstract: The relationship between firm financial performance and sustainability reporting (SR) has been extensively researched previously, but with inconsistent results. By incorporating the coercive isomorphism of the institutional theory, this study examines if the relationship is moderated by the ownership of institutional investors. Using data from a sample of 270 Malaysian public listed firms, the study tested two ordinary least square (OLS) regression models. The results show that firm performance and institutional ownership have a positive link to SR. Further examination however discloses a negative moderation of institutional ownership on the relationship between firm performance and SR, thus fail to support the indication that institutional investors coerce the investee firms to utilise their firm performance for sustainability activities. This study adds to SR-related literature by providing reliable and objective findings and directions for future studies in this context.

Keywords: sustainability reporting; financial performance; institutional investors; institutional ownership; ordinary least square; OLS.

DOI: 10.1504/IJBGE.2023.129419

International Journal of Business Governance and Ethics, 2023 Vol.17 No.2, pp.131 - 154

Received: 01 Oct 2020
Accepted: 04 Jun 2021
Published online: 09 Mar 2023 *

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