Financial Reporting Quality and ESG Prominence on the Relationship of Board Attributes and Ownership Structure to Investment Efficiency of Listed Companies in the Stock Exchange of Thailand
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Abstract
This article aims to study (1) the influence of board attributes, ownership structure, financial reporting quality, and ESG prominence on investment efficiency and (2) the influence of financial report quality and ESG prominence, which mediate the relationship between board attributes and ownership structure on investment efficiency. This research is quantitative. Samples are listed companies on the Stock Exchange of Thailand between 2017 and 2020 in 7 industries, totaling 353 companies with 1,412 samples, excluding some industries that have special regulations and incomplete or outliner data. Secondary data is collected from published databases and websites. Data analysis applies descriptive statistics and inferential statistics. Research results from Structural Equation Modeling (SEM) represent that 1) diversity of Board and financial reporting quality have a positive influence on investment efficiency. (coef. = 0.0516, p-value < 0.10, coef. = 0.1073, p-value < 0.00, respectively) Multiple directorships have a negative influence on investment efficiency. (coef.=0.0390, p-value < 0.10) 2) Financial reporting quality mediates the influence of board diversity on investment efficiency and the influence of multiple directorships on investment efficiency. (coef. = 0.0118, p-value < 0.01, coef. = 0.0069, p-value < 0.05, respectively) 3) Ownership structure and ESG prominence have an insignificant influence on investment efficiency. Research results provide empirical evidence of the role of the board of directors, which supports financial reporting quality and leads to efficient corporate investment.
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