Does Bank Transparency and Disclosure with ESG and Financial Distress Impact Its Valuation? Perspectives from Indian Banks

Does Bank Transparency and Disclosure with ESG and Financial Distress Impact Its Valuation? Perspectives from Indian Banks

The primary objective of the current study is to ascertain the effect of transparency and disclosure (T&D) on the value of banks operating in the Indian banking sector. It also includes finding the moderating impact of financial distress (FD) and environmental, social, and governance (ESG) on the association between T&D and the valuation of banks. The study employs Panel data analysis (PDA) to analyze data and produce novel results thereafter. The authors of the study have considered using data of secondary nature which is sourced from banks operating in the Indian banking industry. Data in the current study has been considered for ten financial years, i.e., 2010 to 2019. The results reveal that T&D positively impacts a firm’s valuation. We have also found evidence that financial distress and ESG (Environmental, Social, and Governance) significantly impact the value of firms under the influence of T&D. As far as we are aware, no study of this kind has been done yet in any developing nation to determine the effect that T&D, FD, and ESG have on the value of Indian banks. This paper can help future researchers in their respective studies that will involve the study variables (FD, T&D, and ESG).