Abstract:
In times when environmental disclosure by firms becomes more and more important, this
research investigates to what extent carbon risk disclosure moderates the relationship
between analyst following and market value for 3.715 European and US firms in the period
2011-2017. In this research, analyst following is defined as the number of analysts
following a firm. The results suggest that carbon risk disclosure has a positive moderating
role. This implicates that the relationship between analyst following and market value
becomes stronger when a firm discloses its carbon risks. These results were found for all
three sorts of carbon risk disclosure: regulatory, physical and miscellaneous. In addition,
carbon risk disclosure positively moderates the relationship between analyst following and
information asymmetry, implicating that it weakens the negative effect of analyst following
on information asymmetry. This study also provides further elaborations, limitations and
suggestions for future research.
Keywords: carbon risk disclosure; market value; analyst following; information asymmetry
