Environmental Sustainability Based on Market Inefficiency and Environment Uncertainty
This study is aimed at examining the impact of market inefficiency and environment uncertainty on the environmental sustainability. Prior research has struggled to establish this relation empirically; moreover, some evidence points to the possibility of the sustainable environment being lower for firms with market inefficiency and environment uncertainty. The opportunistic approach of managers leads to decisions about personal interests and imposing costs on shareholders by decreasing risk taking. To investigate this issue, data on companies listed on the Tehran Stock Exchange for the period of 2008-2018 were extracted and a panel regression model was used to test the research hypotheses. Being consistent with the expected relation between the phenomena under study, it decreases with respect to CEO opportunistic approach. Managers may benefit from increased fluctuations in sustainability orientation, but they are more sensitive than shareholders and have less restrictive choice that avoids higher risk. Therefore, corporate sustainability reporting changes with the market inefficiency and environmental uncertainty.
Keywords: Market Inefficiency, Environment Uncertainty, Environmental Sustainability.
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