Environmental Disclosure and Stock Market Liquidity of Public Listed Firms in Malaysia
Abstract
The frequency of environmental disclosure that implemented by public listed firms worldwide had been increased. This is because disclosure of environmental information can enhance the stock market liquidity. The main purpose of the research was to investigate the relationship between environmental disclosure and the stock market liquidity of public listed firms in Bursa Malaysia in term bid-ask spread. Disclosure of environmental information was measured by using content analysis of word counts in annual reports. There are 465 companies as the final samples from year 2016 had been investigated. The financial data were collected from Data Stream by Thomson Reuters while non-financial were gather from the annual reports. After accounting for control variables such as firm leverage, firm size and market to book ratio, the results showed that there has relationship between environment disclosure and stock market liquidity. Environmental disclosure had positive significant relationship with bid-ask spread. This suggested that high disclosure level of environmental disclosure helped the public listed firms to increase the stock market liquidity and enhance investor in making investing decision by increase firm transparency. For future research, this paper recommended to extend the study by using other variables such as trading volume and stock volatility as other measurements of stock market liquidity.
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