Impact of Sustainability Reporting on Market Value of Companies Listed on the Palestine Exchange رسالة ماجستير

Abstract

This study aimed to investigate the impact of sustainability reports—specifically their economic and environmental dimensions—on the market Value of companies listed on the Palestine Exchange. The study was conducted during the period from 2018 to 2023, covering a sample of 33 companies from the investment, industrial, and services sectors, while excluding the banking and insurance sectors due to their unique disclosure requirements. The research adopted a quantitative analytical methodology, using panel data to assess firm-level variations over time. Data were gathered from annual financial statements, sustainability reports, and the official website of the Palestine Exchange. The total number of observations was 198 (33 companies × 6 years). To test the study hypotheses, the researcher used regression analysis techniques (OLS, Fixed Effects, and Random Effects) and determined the appropriate model using the Hausman test, which confirmed the use of the Fixed Effects Model. The findings indicated a significant and positive association between sustainability reporting—specifically its economic and environmental aspects—and the market valuation of firms. The environmental impact variable emerged as the most influential, indicating that companies that disclose environmental sustainability data more transparently tend to gain higher investor confidence and improved market valuation. Additionally, company age was found to positively influence market Value, while company size had a limited practical effect. The study advised firms registered on the Palestine Exchange to adopt comprehensive sustainability strategies that integrate environmental and economic elements into their core operations and disclosure practices. It also encouraged regulators to consider enforcing mandatory sustainability disclosures to enhance market transparency. Investors were advised to include sustainability criteria in their decision-making processes, while future research was suggested to explore the influence of sustainability in relation to additional financial indicators, including return on assets and earnings per share. The findings contribute both theoretically and practically by reinforcing stakeholder and agency theories and providing empirical support for the strategic importance of sustainability in emerging markets like Palestine.