Title: Unpacking the sustainability of sovereign wealth funds. The effect of financial performances on sustainability disclosure

Authors: Domenico Graziano; Domitilla Magni

Addresses: Department of Economics, University of Campania Luigi Vanvitelli, Corso Gran Priorato di Malta, Capua, 81043, Italy ' Department of Business Studies, RomaTre University, Via Silvio D'Amico 77, Rome, 00145, Italy

Abstract: This paper investigates the effects of sovereign wealth funds (SWFs) on the competitiveness of target companies by analysing whether the financial performance of target companies affects the sustainability disclosures by SWFs. To test our research hypotheses, a sample of 11 international SWFs was explored by multiple regression analysis. The study suggests a moderating effect owing to the size variable in the relation between firms' values and SWFs' sustainability disclosures. Findings support all the hypotheses of the study and provide relevant insights for scholars, managers, and policymakers who are interested in discovering the connection between sustainability disclosures by SWFs and company performance. Furthermore, the study contributes to extend the literature on SWFs and sustainability disclosure, offers original solutions for regulators and practitioners, and fills the gaps existing in previous studies that ignored the moderating role of company size in the relation between firms' performance and SWFs' sustainability disclosures.

Keywords: sovereign wealth funds; SWFs; sustainability disclosure; portfolio investment; financial performance; target company; equity investments; size effect.

DOI: 10.1504/IJMFA.2022.122222

International Journal of Managerial and Financial Accounting, 2022 Vol.14 No.2, pp.157 - 183

Received: 21 Dec 2021
Accepted: 13 Jan 2022
Published online: 12 Apr 2022 *

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