Sustainability reporting and investor sentiment. A sustainable development approach to Chinese-listed firms.

This study highlights the influence of sustainability reporting on investor sentiments in the China Stock Exchange. The study starts by utilizing an Ordinary Least Squares regression model to test the hypotheses. Advanced econometric techniques are then applied to identify the existence of heteroskedasticity. To address potential endogeneity concerns, the analysis incorporates fixed-effect, two-stage least squares, and two-step generalized method of moments regression models. Findings suggest that sustainability reporting has a positive influence on investor sentiments. Conversely, environmental, social, and governance sustainability reporting also positively associations with investor sentiment in fixed-effect, two-stage least squares, and two-step generalized method of moments results. The findings suggest that companies prioritizing transparent and responsible practices enhance their market standing and contribute significantly to sustainable and ethical investing. The research indicates the importance of context-specific sustainability reporting. It provides insights into sustainability's impact on investor sentiments, promoting responsible practices for a sustainable global economy.