Conference Programme
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available). Note that the schedule is subject to changes.
|
Daily Overview |
| Session | |
|
Parallel Session 05: Frictions in Corporate Sustainability Location: Seminar Room 6 (Level 2) Session Chair: Theodor Cojoianu, Singapore Management University. | |
    | |
Demystifying Cheap Sustainability Talks: Theory and Evidence 1: Singapore Management University, Singapore; 2: City University of London We show that even when firms' sustainability claims are costless and non-verifiable, they can still retain (partial) credibility. Non-babbling equilibria arise in a standard cheap-talk model when investors face uncertainty about both cash flows and the sustainability attribute. In such equilibria, sustainability claims are endogenously negatively correlated with cash flows and positively correlated with the sustainability attribute, even if the two are ex ante independent. The negative cash-flow implication of a claim serves as an endogenous cost, enabling credible communication. We characterize how disclosure behavior and credibility vary with the level of cash-flow uncertainty and provide novel empirical evidence supporting this mechanism. Our results shed new light on firms' communication of sustainability information in the absence of regulatory interventions. | |