Analysis of Social Sustainability Performance and its impact on the cost of equity in companies listed in Tehran Stock Exchange

اقتصاد پولی مالی

Article 6, Volume 26, Issue 18, December 2019, Pages 155-196   

Document Type: پژوهشی

DOI: 10.22067/pm.v26i17.71185

Authors

Arash Arianpoor^{* 1}; Yahya Hassas Yeganeh²; Jafar Babajani²

¹Attar institute of higher education

²Allameh Tabataba’i University

Abstract

Increasing demand for companies’ transparency and responsibility and its impact on society and stakeholders, lead in applying principals, rules and guidelines for companies to be used as a base for preparing their various reports. This paper is aimed at analyzing the Social sustainability Performance and its relationship with cost of equity for listed companies on Tehran Stock Exchange.
In order to achieve the main objective of the research, the 3-stage research was conducted. First, after studying literature of research and experts’ opinion, 26 indicators was determined using Confirmatory Factor Analysis (CFA). Then, by reviewing the content of the financial statements and board of directors’ report for 134 companies, the reporting status of these indicators was reviewed during the years 2013-2017. Finally, after collecting data about 79 companies, the research hypothesis was tested using panel data.
Findings show that “work procedures and performance” components are more satisfying than other components. However, the level of Social Sustainability Performance is lower in comparison to foreign studies. Also, contrary to theoretical literature of the research, Social Sustainability Performance has a positive impact on cost of equity which is due to stock price volatility, ignoring companies’ specifications ( such as management ability or employee skills) or the interactive influence of historical and future-based information.

Keywords

Social Sustainability Performance; Social Sustainability Performance Indicator; Social Sustainability Reporting Index; Cost of Equity

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