The Sectorial Analysis Of Moderating Effect Of Business Responsibility And Sustainability Reporting On The Financial Performance And Investor Reaction

Abstract

Purpose – This paper attempts to provide significant information as an indicator of non-financial reporting. Business responsibility and sustainability reporting has gained less attention in pre-existing pieces of literature. The purpose of this study is to examine the relationship between financial performance and investor reaction in the four sectors. Further, the study has also aimed to identify the moderating role of business responsibility and sustainability reporting on financial performance and investor reaction in sectors. There are four sectors considered such as oil and gas industry, fast moving consumer goods sector, health sector and Information technology sector.

Design/Methodology/Approach: This research is based on secondary data. Data was gathered from the company's annual report to analyze the financial performance and BRSR Report. Data on investor reaction gathered from the websites of NSE and BSE. Financial performance is independent variable in this study model. Financial performance consists of four dimensions return on equity, current ratio, debt-equity ratio, and earning per share. In addition, E-views have been adopted to apply regression on data to examine the relationship between variables.

Findings: Findings revealed that financial performance has a significant and positive impact on investors. The study also demonstrates that all industries have positively impacted and supported results.

Practical/Research Implications: This study has implications for investors who have been making investment decisions solely based on information about the firm's financial performance. Specifically, investors can understand the impact of sustainability reports while making an investment decision.

Originality/ Value- This paper adds significant contribution to industry and investor decision making. India has contributed fewer documents in this research area. There is significant potential in India.