Transformations  in
Business & Economics

SUSTAINABILITY REPORTING AND INVESTOR REACTION. EVIDENCE FROM THE ROMANIAN CAPITAL MARKET
Leontina Pavaloaia, Mihai Carp, Iuliana Eugenia Georgescu

ABSTRACT. In the context of interest for sustainable development, companies can act as genuine catalysts for the socioeconomic environment by reconfiguring strategic goals to focus them towards obtaining an integrated performance. Integrated reporting of the three dimensions of performance - economic, social and environmental - completes the data sets used by investors to substantiate investment decisions.
This paper aims by using data that is specific of entities listed on the main section of the Bucharest Stock Exchange to assess the extent to which the quality of sustainability reporting influences investor decision making. The research results reveal a significant influence of the quality of integrated reporting on stock prices, as reflected in the type of submitted report (social, environmental, or both) and the report category (narrative or quantitative), respectively. Both the category and type of sustainability reporting have an insignificant influence on investors' expected performance as assessed based on future stock return .

KEYWORDS:  sustainability reporting, value relevance, Romanian capital market.

JEL classification:  M14, M41, L11.