José-Manuel Prado-Lorenzo

Factors influencing the disclosure of greenhouse gas emissions in companies world‐wide

– The purpose of this study is to analyse different factors behind the disclosure of corporate information on issues related to greenhouse gas emissions and climate change world‐wide., – The empirical analysis carried out was performed in two stages: analysis of the data obtained through content analysis and analysis of the factors that influence the disclosure of greenhouse gas emissions and climate change using a dependency model, a multiple linear regression. Several variables were introduced to represent the size of the companies, leverage, return on assets (ROA), return on equity (ROE) and Market‐to‐Book ratio. Also, other dummy variables have been incorporated: Kyoto Protocol, activity sector in which the company operates and inclusion in the Dow Jones Sustainability Index., – The results obtained show a direct relationship between corporate size, its market capitalization and the disclosure of information in addition to proposed Global Reporting Initiative (GRI) indicators on greenhouse gas emissions. Conversely, an inverse relationship between ROE and disclosure is detected., – The findings emphasize that the main quoted companies operating in industries related to greenhouse gas emissions typically reveal information on almost all the GRI core indicators as well as the additional items specifically proposed for this issue. Moreover, the results suggest a trend for companies to utilize information on greenhouse gas emissions as a mechanism that enables them to legitimise themselves with those groups that can be of benefit to them., – The paper has analysed the disclosure of greenhouse gas emissions and other information of importance to climate change in companies from different countries, some of which have ratified, approved, adhered to or accepted the Kyoto Protocol, and some of which have still not accepted it.

Are social and environmental practices a marketing tool

Purpose – The purpose of this study is to analyse whether CSR practices performed by European companies (both those CSR practices related to marketing‐based strategies and those that are not) create value. That value creation will be gauged through two variables: reputation and shareholder value creation.Design/methodology/approach – To carry out this research, the 120 biggest European companies whose CSR practices have been analysed by Deloitte and Kinchhoff in The Good Company Ranking were taken. European firms have adopted an active stance on CSR and their organisational aspects and responsibilities related to sustainability are better‐founded compared with other companies. Financial data and reputation were obtained from the Forbes and Fortune websites, respectively.Findings – The findings obtained show that all CSR practices, especially those linked to enhancing a companys image, have a positive effect on shareholder value creation, given that investors are able to detect the level of corporate comm...

Determinants of functional decentralization and their relation to debt: empirical evidence based on the analysis of Spanish municipalities

Functional decentralization is aimed at increasing the efficiency, effectiveness and quality of public services, among other advantages, by simplifying the organizational structure and by achieving greater proximity to the end user. Nonetheless, the creation of these entities has been criticized because of the potential to make political use of them to avoid the debt limits imposed on sub-national administrations, as debt would then be transferred to the accounting statements of these agencies. The empirical evidence found in the current study shows that the use of these companies as a mechanism for obtaining external financing is determined by the accounting regulations applicable in relation to the consolidation of accounts. Decentralization processes oriented toward increasing debt are more common among left-wing local governments and are strongly linked to fiscal pressure. Points for practitioners Our results show that foundations are now displacing public companies in decentralization processes in order to obtain external funds, since these agencies are not included in the consolidated accounts. Thus, more rigorous regulation should be established in Spain. This opportunistic use of decentralized agencies is developed on the whole by left-leaning political ideologies as a means of incurring more debt that they need. Thus, it is necessary that external auditing offices (Cámaras de Cuentas) reinforce the monitoring process over local governments in order to circumvent their managerial discretion.

Do Electoral Risks Moderate the Effect of Partisan and Electoral Cycles on Debt-Financed Local Spending?

Governments’ use of debt as a political instrument has been widely studied from the perspective of partisan and electoral cycles, mainly concerning central government. On the whole, previous studies have attempted to determine the effects of political ideology and the proximity of elections on the opportunistic use of public spending. The current study aims to broaden the scope of attention to the effect of partisan and electoral cycles on debt, by means of a broader consideration of the motives that lead politicians to take on a deficit and that are usually linked to the associated electoral risk. More particularly, we examine whether, during the electoral period, greater confidence in re-election can modify party behaviour concerning the use of public spending, and if so, whether the change is greater or smaller depending on the ruling party’s ideology. The results obtained show that local administrations need to incur debt, although politicians take on more liability than is appropriate to their demographic and economic characteristics, especially in an election year. It was also found that political stability favours a reduction in the public deficit, a pattern that is maintained in electoral periods. This effect was found to be independent of the partisan cycle.