Work

ESG disclosure and labour investment efficiency

Year: 2025

Type: article

Abstract: This study examines the impact of environmental, social and governance (ESG) disclosure on firms’ labour investment efficiency. Our results indicate that such impact is positive. ESG disclosure is more effective in curtailing over-hiring and when over-investment in physical capital is high. The uncovered positive association is mainly fuelled by the volume of social and governance disclosure (environmental disclosure barely affects labour investment efficiency), and is more pronounced for firms with a weaker corporate social responsibility performance. The results from the empirical analysis survive a battery of robustness tests, including the use of alternative measures to capture labour investment efficiency, different control variables in regression models, and controlling for endogeneity in ESG disclosure. Our analysis and findings are novel to the literature and contribute to ongoing debates about the impact of ESG disclosure on firms’ performance and about potential benefits and costs of mandatory disclosure.

Source: Research in Economics

DOI: 10.1016/j.rie.2025.101060

Authors: Paulo Pereira da Silva, Isabel Vieira

Institutions: University of Évora, Centro de Estudos e Formação Avançada em Gestão e Economia

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $2,950