Page 1 of 29 Executive Summary The purpose of this report is to give details on a professional project aimed at investigating the impact of sustainability disclosures on market performance, which is then elaborated into three research questions. The first question is about the probability of issuing sustainability report among 50 constituent stocks in Hong Kong’s Hang Seng Index (HSI). The second one is about the connections between sustainability reports and the industry companies belong to. The third one is about the links between sustainability reporting and market performance. Previous literature explained the existence of sustainability report by two sets of theories. Social-political theories (political economy theory, stakeholder theory and legitimacy theory) offer insights about companies facing social and political pressures to provide environmentally information, which implies that companies belong to environmentally sensitive industries are more likely to deliver certain information. Voluntary disclosure theory suggested that superior companies will provide information to distinguish with the inferior ones, which infers that there is a correlation between sustainability information and market performance. Data collected in the companies’ websites to analyse the links between sustainability reports, industry and market performance. The results is that sustainability reports have significant relationships with industry and market perception. This study concludes that disclosers outperform non-disclosers, which may provide an insights for the managers of non-disclosing companies. Commented [OM1]: Note the student immediately launches into the overall aim of the project. Commented [OM2]: There are some small English language difficulties in the assignment, but in terms of the core elements of a high quality student research project, this paper is very well done. Commented [OM3]: The student makes some effort to link this project with a theoretical background. This is not absolutely essential but it is one of the elements that leads to this being a “high distinction” assignment. Commented [OM4]: So a good executive study gives a hint of how the data was collected and the results, as well as the other elements (theoretical background, etc). This executive summary is excellent. Page 2 of 29 Table of Contents 1 Introduction ........................................................................................................... 3 1.1 Problem Statement ................................................................................... 3 1.2 Research aim and research questions .................................................. 4 2 Literature review .................................................................................................. 5 2.1 Sustainability report and its development ............................................. 5 2.2 Social-political theories ............................................................................ 5 2.3 Voluntary disclosure theory ..................................................................... 8 3 Methodology ....................................................................................................... 10 3.1 Data collection ......................................................................................... 10 3.2 Data analysis ........................................................................................... 10 3.2.1 Sustainability report ............................................................................ 11 3.2.2 Shareholder return, market perception and industry ..................... 11 4 Findings and analysis ....................................................................................... 12 4.1 Descriptive Statistics .............................................................................. 12 4.2 Bivariate Correlations ............................................................................. 14 4.3 Logistic Regression Results .................................................................. 15 5 Discussion .......................................................................................................... 16 5.1 H1: Sustainability reports are significantly related to the industry the company belongs to as implied in social-political theories ......................... 16 5.2 H2: Sustainability reports are significantly related to the shareholder returns (growth in earnings per share) as implied in voluntary disclosure theories H3: Sustainability reports are significantly related to the market perception (growth in year-end share price) as implied in voluntary disclosure theories. ........................................................................................... 17 6 Conclusion .......................................................................................................... 18 6.1 Addressing aims and research questions ........................................... 18 6.2 Limitations ................................................................................................ 19 6.3 Recommendations .................................................................................. 19 Reference ........................................................................................................... 22 Appendix: Logbook (Week 9 – Week 11) ...................................................... 25 Appendix: Results from SPSS ........................................................................ 27 Page 3 of 29 1 Introduction Becoming a professional accountant is a career path in the future as a student of Master of Professional Accounting. This topic is about sustainability report, which is a trend for accounting professionals to prepare and assure sustainability information to the public. At the first part of this report, it will include background of the project, research aim and questions, and literature review. In the other part, the methodology, finding, discussion and conclusion will be explained and explored. 1.1 Problem Statement For the last few decades, general public get more interests in the way of companies performing business, and affecting the environment. This leads to a new tendency of sustainability disclosures, or even a separate report called sustainability report. This type of report issued by a company, which mentions different impacts including the economic, environment and social, caused by its daily activities (GRI n.d. b). There is no rules and regulations about sustainability report. Sustainability disclosure is voluntary. 90% of Fortune 500 companies included sustainability as part of their companies’ strategy (Kotler and Lee, 2004). Throughout these years, there is an incline in the coverage on sustainability report which is for shareholders and other stakeholders (Cooper & Owen, 2007, as cited in Carnevale & Mazzuca, 2014). There are positive effects on society from sustainability reports (Karim, Suh, Carter, & Zhang, 2015), which leads to the same positive effects on companies. Recent researches indicate that more disclosures have positive effects to environmental performance (Clarkson, Li, Richardson and Vasvari 2004, as Commented [OM5]: Generally non dated sources from websites are NOT good sources. I would prefer to see peer reviewed journal sources in these early sections. Some professional and government sources (such as bureau of statistics sources) is acceptable. This student has used far more than the minimum required references. S/he has done so because she NEEDED to to cover the topic properly. S/he gets extra marks because of this. Commented [OM6]: I generally prefer to see students use original sources, not sources cited in other sources. Page 4 of 29 cited in Elijido-Ten, 2011). However, there is not many discussions about the impacts of sustainability disclosure on the market performance of individual companies (Ilacqua, 2008). Hong Kong, as an international financial centre, is a major office of many companies and multinational corporations, which have engaged in sustainability reporting (Sustainable Development Division n.d.). Some of the corporations even adopted global guidelines to prepare sustainability reports and seek external auditors to assure their sustainability reports (CPA Australia, 2013). It is critical to test if there is any relationship between sustainability disclosures and market performance. 1.2 Research aim and research questions The aim of this research is to identify the impact of sustainability disclosures on market performance, and more specifically to: Research questions The following research questions are developed to achieve the aim.  To what extent does the sustainability reports available among 50 constituent stocks in Hong Kong’s Hang Seng Index (HSI)?  Any relationship between sustainability reporting and industry of the organisations?  Do correlations exist between sustainability reporting and market performance? Commented [OM7]: IN the Executive Summary the student used more formal expression, H1, H0 etc, which you will recall from your BUSN20016 course. However, this is acceptable. It’s good to see a formal stating of the research hypotheses like this. In fact looking ahead, the student has stated hypotheses later.. I would prefer to see this section called ‘research aims’. Page 5 of 29 2 Literature review 2.1 Sustainability report and its development In the past, accountants focused only on financial data and its accountability for many years, the term ‘social accounting’ started to be discussed from the 1960s (Drucker, 1965, as cited in Tilt, 2009, p. 12). At the same time, numerous researches examined social and environment issues. The term Corporate Social Responsibility (CSR) emerged eventually, and it is known as sustainability report recently (Tilt, 2009). Until 1997, Global Reporting Initiative (GRI) was founded in Boston to help governments, businesses and other organisations in communicating the impact of daily activities on sustainability issues (GRI, n.d. a). GRI also promotes its vision of making sustainability reporting as routine and comparable as financial reporting (Tilt, 2009). A number of studies in the past tried to find out reasons of sustainability disclosures. Several theories mentioned in the previous studies, attempted to explain the fast growing trends of sustainability reports by companies and organisations. 2.2 Social-political theories Social-political theories consist of political economy, legitimacy and stakeholder theory. Unlike some previous economic theories, which focus on economic self interest and wealth maximisation of an individual or corporation, political economy theory is about political, social and institutional framework within which the economic takes place (Omran and El-Galfy, 2014). This theory demonstrates an important point that economic domain need to be studied together with its political, social and institutional framework (Gray, Kouhy, and Commented [OM8]: It’s possible to go from intro to lit review and THEN go to research questions or research aims. This student has chosen an alternative route. Page 6 of 29 Lavers, 1995). While political economy theory is a background of social political theory, which indicates public interest, stakeholder theory and legitimacy theory focus more about the connection between the economy and the entire political, social and institutional framework (Gray et al., 1995). Stakeholder theory points out that company need stakeholder support and approval in order to be able to survive (Omran and El-Galfy, 2014). Stakeholders not only include shareholders, but also employees, customers, media, suppliers, government and special interest groups (Carnevale and Mazzuca, 2014). If the stakeholders are more powerful, company is more likely to listen to their opinions. Sustainability disclosures act as a bridge between the company and their stakeholders (Gray et al., 1995). Legitimacy theory mentioned that companies need to react according to the constraints imposed by social norms and values so that companies behave with respect to the environment (Omran and El-Galfy, 2014). Sustainability disclosure is to facilitate the perception of social image, which raises the companies’ legitimacy and reputation (Michelon, 2011). Lindblom (1994, as cited in Patten, 2002) indicated that companies choose to disclose in order to inform the public about their changes in performance, alter perceptions about the company, lead public to focus on the highlighted achievements, try to change public expectations. These overlapping theories (stakeholder theory and legitimacy theory), which are set within the framework of political economy theory, suggest that companies choose to disclosure more about their social and environmental Page 7 of 29 performance because of social and political pressures, which is developed by increased public interests (Patten, 2002). Elijido-Ten (2011) supported that these theories implied that the more social and political pressure faced by companies, the more likely the companies provide environmental disclosure. Previous studies suggest industry and company size of the company are factors which lead to more public concerns and pressure. Regarding Hong Kong market, Gao, Heravi and Xiao (2005) analysed 154 annual reports of 33 listed companies between 1993 and 1997 and discovered that the level of corporate social and environmental disclosures and company size are positively related. Tang and Chan (2010) provided results, which showed that companies with larger total assets and more debts to equity published sustainability reports with more information. Elijido-Ten (2011) examined Australia’s Top 100 companies on their market performance, sustainability and balanced scorecards (BSCs), company size and industry and found out that disclosures are positively related to company size and industry. Based on the above theories and previous studies, the first hypothesis is developed as follows: H0: Sustainability reports are not significantly related to the industry the company belongs to as implied in social-political theories. H1: Sustainability reports are significantly related to the industry the company belongs to as implied in social-political theories. Page 8 of 29 2.3 Voluntary disclosure theory Voluntary disclosure research first developed to discover the factors which drive the differentiations in financial reporting quality (Healy, Hutton and Palepu, 1999, as cited in Guidry and Patten, 2012). It then extended to the environmental disclosure aspect. This theory suggests that there is a positive relationship between performance in social and environmental issues and the level of disclosure (Dye, 1985 and Verrecchia, 1983, as cited in Clarkson, Li, Richardson, & Vasvari, 2008). Companies with good environmental performance want to distinguish with those poor performing companies intend to disclosure more about their social and environmental achievements (Elijido Ten, 2011). Some researchers studied on the relationships between sustainability disclosure and environmental performance. Clarkson et al. (2008) found that there is a positive relationship between the level of disclosure and environmental performance with a sample of 191 companies in the US. Al Tuwaijri, Christensen and Hughes (2004) also provided a similar results in their research. Some other studies focused on the associations between sustainability disclosure and market performance based on the assumptions that companies, which provide sustainability information should be those companies which intend to differentiate themselves with inferior performing companies. Carnevale and Mazzuca (2014) studied a sample of European banks and concluded that investors value the sustainability information and provides a Page 9 of 29 positive effect on stock prices. However, there is a negative impact on book value per share and no significant effect on earnings per share. Elijido-Ten (2011) examined Australia’s Top 100 companies on their market performance, sustainability and balanced scorecards (BSCs), companies with disclosures had a better performance in shareholder returns and market perception than companies without disclosures. Instead of focusing on sustainability reporting, Ilacqua (2008) examine the effect of corporate social responsibility (CSR) activities on stock prices of 42 USA-based companies listed on NASDAQ Biotechnology Index. Activities included human resources, environmental, customer and suppliers, corporate giving, and corporate governance practices. Significant relationships existed between stock prices and customers and suppliers, human resources and corporate governance expense disclosures. Based on the above theory and previous studies, the hypotheses are developed as follows: H0: Sustainability reports are not significantly related to the shareholder returns (growth in earnings per share) as implied in voluntary disclosure theories. H2: Sustainability reports are significantly related to the shareholder returns (growth in earnings per share) as implied in voluntary disclosure theories. H0: Sustainability reports are not significantly related to the market perception (growth in year-end share price) as implied in voluntary disclosure theories. H3: Sustainability reports are significantly related to the market perception (growth in year-end share price) as implied in voluntary disclosure theories. Page 10 of 29 3 Methodology 3.1 Data collection The aim of this study is to determine if sustainability disclosure is related to industry, shareholder return and market perception. This is an exploratory study and based on secondary sources, which are publicly available written documents. To be more precise, annual reports, sustainability reports and other company documents of companies will be reviewed. Hang Seng Index, which was publicly launched on 24 November 1969, is the most broadly quoted indicator of the performance of Hong Kong stock market (Hang Seng Indexes, n.d.). There are 50 constituent stocks in Hang Seng Index. Data will be collected for 2013 and 2014 as 50 constituent stocks have not been changed much in these two years. List of 50 constituent stocks can be obtained in Hang Seng Index official website. List of constituent stocks as at 31 December 2013 is chosen. Annual reports and other documents provided to stakeholders will be downloaded from company’s official websites. 3.2 Data analysis Quantitative data, such as earnings per share and year-end share prices are collected from annual reports and financial websites. Neuman (2004, as cited in Ilacqua, 2008) mentioned that it is appropriate to use quantitative methods for researches that measure facts on variables where reliability is important, a large number of samples and data can be analysed statistically. They will be analysed by using correlation and regression analysis, so as to find out the relationship between sustainability reporting and market performance. Logistic Commented [OM9]: WHIle I may not agree exactly with the students approach, and it is not PERFECT, it’s a good effort to make this research project truly a research project. For example, I don’t think this is an exploratory study. Page 11 of 29 regression is used when the dependent variable is discrete outcome (Sekaran and Bougie, 2013). SPSS software is used to provide correlation and regression analysis. 3.2.1 Sustainability report The first part of this analysis is to find out which companies provide sustainability reports. The data collection process is started by searching sustainability reports in each company official website, Global Reporting Initiative sustainability disclosure database and Google to find out if the companies publish sustainability reports. Some companies publish standalone reports and some companies include sustainability information in their annual reports. Standalone reports include more information than annual report. Prior researches demonstrate that there is a time lag between publishing sustainability report and shareholders return (Crabtree and Debusk, 2008), so companies which publish standalone report more than three years before 2013 are selected. 3.2.2 Shareholder return, market perception and industry The analysis is that whether companies which provide sustainability report have a better performance in shareholder returns and market perception than those do not provide. To consistent with prior studies (Elijido-Ten, 2011), shareholder returns are calculated by the growth of earnings per share. Earnings per share of both 2013 and 2014 are collected from the annual reports of each companies and growth rates are calculated. Market perception is represented by the growth of year-end share price of the Page 12 of 29 50 constituent stocks. Share prices as at year-end in 2013 and 2014 are searched from finance websites, Yahoo! Finance. Growth rates are then computed by comparing the figures of these two years. To determine if there is relationship between industry and providing sustainability information. It is necessary to identify the industry of each company. Hang Seng Index has divided 50 constituent stocks into Finance, Utilities, Properties and Commerce (Hang Seng Indexes, n.d.). However, these industry classifications are not specific about sustainability disclosure. Prior studies indicated that environmentally sensitive industries have more incentive to provide sustainability information (Elijido-Ten, 2007). These industries are those in mining and resources, building, energy, utilities, materials, transportation and logistics (Elijido-Ten, 2007). All other industries are considered as non-environmentally sensitive industries. 4 Findings and analysis 4.1 Descriptive Statistics Within 50 constituent stocks, 35 of them provided standalone sustainability reports in 2013. The earliest sustainability report was issued by MTR Corporation in 2001. 9 of them started to publish standalone sustainability reports within three years before 2013. Therefore, there are 26 companies issued standalone sustainability reports for more than three years from 2013. These three years, the number of companies in Hang Seng Index publishing sustainability reports increased from 52% to 70%. This demonstrates the importance of sustainability disclosures. Table 1 shows descriptive statistics. Commented [OM10]: The student has attempted some statistics. This is excellent. Just saying “this was higher than that” is not very good. Students who do everything else and when it comes to the findings just says “the average scores were x” and “this seemed to be higher than that”…will still pass.. But again, this is excellent. Commented [OM11R10]: Page 13 of 29 The descriptive statistics also show that only about 28% out of 50 sample companies are classified as environmentally sensitive industries including mining and resources, building, energy, utilities, materials, transportation and logistics. Table 1: Descriptive Statistics (Indicator Variables) Variable Variable Description Number of company with 0 (%) Number of company with 1 (%) Sustainability Report (SR) Sustainability Report (SR) issued solely for more than three years from 2013 (Yes = 1 and No = 0) 24 48% 26 52% Industry (IND) Company in environmentally sensitive industry (i.e. mining and resources, building, energy, utilities, materials, transportation and logistics) (Yes = 1 and No = 0) 36 72% 14 28% Growth of earnings per share (GEPS) and growth of year-end share price (GYEP) are the continuous variables. The descriptive statistics of these two variables are shown in Table 2. GEPS in 2014 has a minimum of -108.86% and a maximum of 446.46%. The range of the growth in earnings per share is 555.32%. The mean and standard deviation of GEPS are 7.27% and 71.75% respectively. Growth in year-end share price in 2014 has a minimum of -46.34% and a maximum of 34.98%. The range of the GYEP is 81.32%, which is lower than Page 14 of 29 those of GEPS. The mean and standard deviation of GYEP are 1.9% and 18.08% respectively. This shows that both earnings per share and year-end share price rose in 2014, and the rise in earnings per share is higher than the rise in year-end share price. This also indicates that the volatility of growth in earnings per share (GEPS) is higher than that of growth in year-end share year. Table 2: Descriptive Statistics (Continuous Variables) Variable Range Minimum Maximum Mean Standard Deviation Growth in Earnings Per Share for 2014 (GEPS) 555.32 -108.86 446.46 7.27 71.75 Growth in Year End Share Price for 2014 (GYEP) 81.32 -46.34 34.98 1.90 18.08 4.2 Bivariate Correlations Table 3 shows the correlation matrix. The Pearson results show that the sustainability report (SR) and industry (IND) are positively and significantly correlated, with significance at p < 0.1. As for market performance, only growth in year-end share price (GYEP) has a positively relationship with SR at 1% significant level. However, there is no significant relationship between SR and growth in earnings per share. To check the correlations, non-parametric Spearmen Rank correlation is also shown in Table 3. The significance levels appear to coincide with the Pearson one. According to Tabachnik and Fidell, 2011 (as cited in Elijido-Ten, 2011), a harmful level of multicollinearity is not present as no correlation coefficient is above 0.8. Page 15 of 29 Table 3: Bivariate Correlation (N = 50) SR IND GEPS GYEP SR Pearson Sig. (2-tailed) 1 0.243* 0.090 0.227 0.112 0.374** 0.007 IND Pearson Sig. (2-tailed) 0.243* 0.090 1 -0.100 0.488 -0.090 0.536 GEPS Pearson Sig. (2-tailed) 0.227 0.112 -0.100 0.488 1 0.210 0.143 GYEP Pearson Sig. (2-tailed) 0.374** 0.007 -0.090 0.536 0.210 0.143 1 *Correlation is significant at the 0.1 level. **Correlation is significant at the 0.01 level 4.3 Logistic Regression Results Hypotheses H1 to H3 are tested by using logistic regressions. The dependant variables are SR, which is whether the companies provided standalone sustainability reports three years continuously before 2013. The independent variables are industry that the companies belong to (IND), growth in earnings per share (GEPS) and growth in year-end share price (GYEP). The regression model estimation is presented in Table 4. Table 4: Regression model (N = 50) Estimate S.E. Wald df Sig. IND -1.682 0.831 4.094 1 0.043 GEPS 0.009 0.011 0.716 1 0.397 GYEP 0.059 0.023 6.579 1 0.010 Constant 1.165 0.700 2.771 1 0.096 Commented [OM12]: Including regression results is really impressive. The actual attempt to do real research in this project is so good, that this study could form the basis (with further development) for a peer-reviewed journal article…and that’s excellent! Page 16 of 29 The analyses show that industry (IND) is significantly related to SR, however, the coefficient estimate sign is negative implying that non-environmentally sensitive industries provide sustainability report. GYEP is positively and significantly related to SR, while there is no significant correlation between GEPS and SR. 5 Discussion This section will compare the findings and literature review. The purpose of this study was to examine if the market performance, as measured by growth in earnings per share and growth in year-end share price, is associated with sustainability disclosure provided in a sample of 50 companies being the constituent stocks in Hang Seng Index between 2013 and 2014. 5.1 H1: Sustainability reports are significantly related to the industry the company belongs to as implied in social political theories The findings show that sustainability disclosures increased within three years before 2013. More than half of companies published standalone sustainability reports. Both correlation and regression analyses indicate sustainability disclosures has significant relationship with industry. However, regression model contradicts with the claims made in the previous literature review. Social political theories, which comprise political economy theory, stakeholder theory and legitimacy theory, suggest that the willingness of disclosing environmental information is based on the level of social and political pressure faced by the companies. This implied that the environmentally sensitive companies have a Page 17 of 29 higher chance to provide sustainability information, which is confirmed by the findings. In contrast, regression model indicates that non-environmentally sensitive companies have a higher chance to provide sustainability information. 5.2 H2: Sustainability reports are significantly related to the shareholder returns (growth in earnings per share) as implied in voluntary disclosure theories H3: Sustainability reports are significantly related to the market perception (growth in year-end share price) as implied in voluntary disclosure theories. The findings, confirm that sustainability reports are significantly related to market perception, as measured by growth in year-end share price. This reinforces that companies with better performance intend to provide more information to maintain their superiority against non-disclosers, which is also known as voluntary disclosure theory mentioned in the literature review. In contrast, the findings do not provide sufficient evident to confirm that there are associations between sustainability reports and shareholder returns, which is demonstrated by earnings per share. These findings consistent with the results from previous researches by Carnevale and Mazzuca (2014). They also concluded that positive relationships exist between sustainability information and stock prices, but not earnings per share. This may be because earnings per share is a short term result, which depends on the performance of that particular year (Carnevale and Mazzuca, 2014). Commented [OM13]: This is excellent. The student is linking the findings with previous literature. The literature review should be looped back into the discussion section, ideally. Page 18 of 29 6 Conclusion This section will address aims and research questions, point out the limitations and recommendations. 6.1 Addressing aims and research questions The aim of this research is to investigate the impact of sustainability disclosures on market performance. Three research questions are provided to specifically address to the aim. First question is about the percentage of companies among 50 constituent stocks in Hong Kong’s Hang Seng Index (HIS). The results show that as of 2013, there are 35 companies provided standalone sustainability reports, which account for 70%. Out of these 35 companies, 26 of them had provided standalone sustainability reports for more than three years before 2013, which is 52%. The second question is about the relationship between sustainability reports and industry of the companies. The research results demonstrate a significant and negative relationship between these two variables, which may infer that social and political attention not only focus on environmentally sensitive industries, but also non-environmentally sensitive industries. This result is similar to those in previous studies by Elijido-Ten (2011). The third question is about the correlations between sustainability reporting and the market performance. The results partly support the positive relationship between them. To be more specific, the data demonstrates that sustainability Page 19 of 29 reporting is positively related to market perception, which is shown by growth in year-end share price, while no significant correlation is found between sustainability reporting and shareholder return, which is measured by growth in earnings per share. This result is similar to those in previous studies by Carnevale and Mazzuca (2014). 6.2 Limitations The first limitation of this research is the sample size of 50 companies. Although, according to Mundfrom, Shaw and Ke (2005), this is above the minimum sample size with four variables, it is better to be recognised that this studies may be focus on these 50 companies and may not be generalised to all other companies. The second limitation is that these 50 companies are all listed and mainly based in Hong Kong. As a major international finance centre in Asia, many multinational companies are listed in Hong Kong, and some of companies in the sample operated or invested internationally, such as HSBC Holdings, AIA Corporation. It is good to noted that this studies may be focus on Hong Kong market and may not be generalised to other regions. 6.3 Recommendations This sub-section will identify the recommendations for managers and professionals as well as researchers. As this project concludes that there is a significant relationship between sustainability reporting and market perception, this may imply that potential Commented [OM14]: Excellent recommendations. Note how the student has again mixed in academic references. Great work here. Page 20 of 29 investors may seek more sustainability information. It is suggested that those companies, which have not provide sustainability information to public, should consider publishing this kind of information. The findings confirm sustainability information is positively related to market perception. However, unlike financial reports, there is no rule and regulation about the quality of the sustainability report. Jaggi and Zhao (1996) indicated that there was a gap between actual environmental disclosures and the perceived importance of environmental disclosures. It is recommended that those companies, which publish sustainability report annually, should understand the expectation of stakeholders in order to improve their quality of sustainability report. As demonstrated above, sustainability reporting is important to companies. Accounting professionals and accounting firms should be aware of the trends and importance of sustainability reports. Wong, Wong, Li and Chen (2016) indicated that companies chose from three types of providers, such as accounting firms, non-accounting specialist consulting firms and non accounting general consulting firms and concluded that larger firms tended to hire accounting firms to add credibility to their sustainability reports. As for researchers, as more companies start to prepare sustainability reports annually, stakeholders’ expectation about sustainability reporting is also an interesting topic for further studies. This study focuses on Hong Kong. Some other studies focus on Australia Page 21 of 29 (Elijido-Ten, 2007), the United Kingdom (Karim, Suh, Carter, & Zhang, 2015) and the United States (Ilacqua, 2008), research in other regions, especially those in Asia, is recommended to investigate if other regions have similar results. This study focuses on listed companies and, according to Studer, Tsang, Welford and Hills (2008), small and medium-sized enterprises are not aware of the importance of environmental impacts of the business. It is suggested that further studies about the impact of sustainability information provided by small and medium enterprises on market performance may be beneficial to the managers of small and medium companies. Page 22 of 29 Reference Al-Tuwaijri, S.A., Christensen, T.E. & Hughes, K.E. (2004). The relations among environmental disclosure, environmental performance, and economic performance: A simultaneous equations approach. Accounting, Organizations and Society, 29(5), 447-471. 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Page 25 of 29 Appendix: Logbook (Week 9 – Week 11) Page 26 of 29 Page 27 of 29 Appendix: Results from SPSS Descriptive Statistics (Indicator Variables) Sustainability Report Frequency Percent Valid Percent Cumulative Percent Valid 0 24 48.0 48.0 48.0 1 26 52.0 52.0 100.0 Total 50 100.0 100.0 Industry Frequency Percent Valid Percent Cumulative Percent Valid 0 36 72.0 72.0 72.0 1 14 28.0 28.0 100.0 Total 50 100.0 100.0 Descriptive Statistics (Continuous Variables) Descriptive Statistics N Range Minimum Maximum Mean Std. Deviation Growth in earnings per share 50 555.32347460 -108.86075950 446.46271510 7.2745128135 71.75260213010 Growth in year-end share price 50 81.31712150 -46.33967789 34.97744361 1.8964048705 18.08001736755 Valid N (listwise) 50 Page 28 of 29 Bivariate Correlation (N = 50) Correlations Sustainability Report Industry Growth in earnings per share Growth in yearend share price Spearman's rho Sustainability Report Correlation Coefficient 1.000 .243 .227 .374** Sig. (2-tailed) . .090 .112 .007 N 50 50 50 50 Industry Correlation Coefficient .243 1.000 -.100 -.090 Sig. (2-tailed) .090 . .488 .536 N 50 50 50 50 Growth in earnings per share Correlation Coefficient .227 -.100 1.000 .210 Sig. (2-tailed) .112 .488 . .143 N 50 50 50 50 Growth in year-end share price Correlation Coefficient .374** -.090 .210 1.000 Sig. (2-tailed) .007 .536 .143 . N 50 50 50 50 **. Correlation is significant at the 0.01 level (2-tailed). Page 29 of 29 Logistic regression model (N = 50) Variables in the Equation B S.E. Wald df Sig. Exp(B) Step 1a Industry(1) -1.682 .831 4.094 1 .043 .186 Growth in earnings per share .009 .011 .716 1 .397 1.010 Growth in year-end share price .059 .023 6.579 1 .010 1.060 Constant 1.165 .700 2.771 1 .096 3.206 a. Variable(s) entered on step 1: Industry, Growth in earnings per share, Growth in year-end share price.