Transparency and information asymmetry in the financial market: Strategic dependencies between sustainability disclosure, SDG achievement and financial and information efficiency

Abstract

In today’s financial world, the pursuit of sustainable development has evolved from an ethical imperative to a strategic necessity. It has spurred corporations to enhance transparency regarding their non-financial and responsible or ESG practices. This paper aims to formalize the strategic dependencies between sustainability disclosure, SDG achievement, and the financial and information efficiency of the financial market. The research methods are normality tests, canonical correlation analysis, and multivariate multiple and univariate regression analysis. The object of the study is 137 countries. The time period is 2022. The results confirmed that a positive strong correlation was found between sustainability disclosure and the achievement of the SDGs on the one hand and financial and information efficiency of the financial market on the other. Identifying the direction of the relationship also confirmed two-way positive dependencies between the indicators, in particular, the SDG Index will have the most significant impact on the growth of GDP per capita, the change in the Economic Sustainability Competitiveness Index on the growth of the United Nations Global Compact participants. The specified connection can be used as the basis for the formation of the concept of ensuring transparency and leveling information asymmetry in the activities of enterprises.

Keywords

• competitiveness
• disclosure
• ESG
• GDP
• responsible investments
• sustainable development