Determinants of Sustainability Disclosure: A Comparative Panel Analysis of Emerging and World Markets

Abstract

This study explores the determinants of sustainability disclosure and examines cross-market differences between the DJSI Emerging Markets Index and the DJSI World Markets Index. Using a panel dataset consisting of 595 company-year observations from 85 companies across 23 countries that were continuously included in the index during the 2016–2022 period, fixed-effects models estimated with Driscoll–Kraay standard errors were applied. The findings reveal substantial cross-market differences. In emerging markets, corporate governance mechanisms exhibit limited explanatory power, suggesting that sustainability disclosures are weakly institutionalized. In contrast, in world markets, sustainability disclosures are more strongly associated with board independence, firm maturity, and financial capacity. The negative relationship between auditor tenure and disclosure highlights the importance of auditor independence. Furthermore, the weak association between CO₂ emission intensity and disclosure scores indicates a potential disconnect between reported sustainability information and actual environmental performance. Overall, the findings underscore the critical role of institutional and organizational context in shaping sustainability disclosure practices. This study contributes to the sustainability disclosure literature by providing a comparative panel analysis of emerging and world markets using DJSI-listed firms. It highlights how institutional contexts shape disclosure practices differently and offers empirical evidence on cross-market variations by integrating governance and financial determinants within a unified analytical framework.