Financially Distressed Firms: Environmental, Social, and Governance Reporting in Indonesia

Round 1

Reviewer 1 Report

Review of the paper:

Financial Distressed Firms Desire in Environmental, Social,  and Governance Reporting

 

l.41 "management should be fascinated with the benefits" consider a rephrasing of the sentence

L0 I would suggest setting up the research around "impression management" and enhance the theocratization thereon. COR seems to be too far from your core message

L68 Instead of the middle-income argument consider the argument form Tomaczak et. al (2020) that limitation to one county allows better control over  local variables, which cannot be convincingly controlled if we deal with different countries (e.g. cultural differences).

L183 I would rather add up the more basic critiques of the IR raised by  (Flower, 2015) and the Staszkiewicz and Werner (2021) solution as the response that reporting of one value as the internalities and externalities is hard to interpret.

L.91"may provide is using dataset" how about "robust data"

1. 211 I would suggest taking all the definition of variables into one place (eg. table or appendix) it is difficult to follow the paper as the definition are inline.

"The ESG reporting variable is measured by total items 211 disclosed by the firm deflated by total items provided by each GRI guideline" - this is only a quantitative aspect, how you control the quality of ESG disclosure?? - consider a limitation of the study.

L.222 Z sore is data driven and ineffective on different economies and amortized itself over time due to the e.g. changes in accounting frameworks, it suffer from the linearity and quality of the data, all those arguments should be discussed in the discussion section including the robust checking of your result.

L.222 The most important issue why you believe the Altamn but not locally developed model should be used in your study.

1. 239 I would suggest putting the table in text or as the appendix with list of all of the variables and their definition, expectation in terms of sing etc.

            I do not understand why you do not control with the financial audit opinion type and ESG audit opinion type. BIG4 is too weak proxy if you target such a specific issue. Compare (Yu et al., 2020) for agency problem.

L.262 Why did you not reported the "skewness and kurtosis" on variables, are they symmetric?

L 298 Fit of the model is relatively low (0,3) how did you account for variability from the given companies (e.g. panel models)? Probably due to limitation of the timespan, I would consider a limitation of the study.

Nice shown the robustness section.

The discussion with literature quite limited.

 

Overall

Interesting informative paper need some correction and clarification.

 

Ref:

Flower, J. (2015). The international integrated reporting council: A story of failure. Critical Perspectives on Accounting, 27, 1–17. https://doi.org/10.1016/j.cpa.2014.07.002

Staszkiewicz, P., & Werner, A. (2021). Reporting and Disclosure of Investments in Sustainable Development. Sustainability, 13(908). https://doi.org/10.3390/su13020908

Tomczak, S. K., & Staszkiewicz, P. (2020). Cross-Country Application of Manufacturing Failure Models. Journal of Riska and Financial Managment, 13(34), 1–10. https://doi.org/10.3390/jrfm13020034

Yu, E. P., Luu, B. Van, & Chen, C. H. (2020). Greenwashing in environmental, social and governance disclosures. Research in International Business and Finance, 52, 101192. https://doi.org/10.1016/j.ribaf.2020.101192

 

Author Response

Please see the attachment

Author Response File: Author Response.pdf

Reviewer 2 Report

Very interesting paper. Please see below my comments: 1) In introduction, you should identify a clear research gap to fill with your insights. At the current stage, your contributions are only practical. You should try to identify a scientific gap. These are some useful references: Pizzi, S., Caputo, F., & Venturelli, A. (2020). Does it pay to be an honest entrepreneur? Addressing the relationship between sustainable development and bankruptcy risk. Corporate Social Responsibility and Environmental Management, 27(3), 1478-1486. Ambec, S., & Lanoie, P. (2008). Does it pay to be green? A systematic overview. The Academy of Management Perspectives, 45-62. 2) Please provide more details about your sample's selection 3) Please provide more details about your variables' selection 4) The asbence of a clear research gap to fill negatively impact on the scientific soundness of your discussions. Please extend your discussions with more theoretical reflections.

Author Response

Please see the attachment.

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

No more issues detected. Good luck with the next project.