Document Type
Article
Source of Publication
International Review of Economics and Finance
Publication Date
10-1-2025
Abstract
This study examines the relationships among carbon disclosure (CD), carbon performance (CP), and agency cost (AC) using a global sample across major industries. Employing Partial Least Squares Structural Equation Modelling (PLS-SEM) via WarpPLS, we find that increased carbon disclosure reduces agency cost, while improved carbon performance may increase it, likely due to the capital-intensive nature of environmental investments. Carbon disclosure is shown to mediate the relationship between carbon performance and agency cost. Firms in countries with emissions trading schemes and higher environmental performance indices tend to perform better in carbon management. Unlike previous studies focused solely on firm performance, this research contributes to the literature by examining how carbon-related practices influence agency costs, using comprehensive CDP-based measures and agency theory, stakeholder theory, and instrumental stakeholder perspectives.
DOI Link
ISSN
Publisher
Elsevier BV
Volume
103
Disciplines
Business
Keywords
Agency cost, Asset utilization ratio, Carbon disclosure, Carbon performance, Carbon-regulated institutional context, Emissions trading scheme
Scopus ID
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Recommended Citation
Siddique, Md Abubakar; Abdel-Maksoud, Ahmed; Rashid, Afzalur; and Karim, Sitara, "The effects of carbon disclosure and carbon performance on agency cost: International evidence" (2025). All Works. 7400.
https://zuscholars.zu.ac.ae/works/7400
Indexed in Scopus
yes
Open Access
yes
Open Access Type
Gold: This publication is openly available in an open access journal/series