Controlling Owner Nature, Visibility and Sustainability Disclosure

We investigate how the nature of a firm’s ultimate controlling owner influences its sustainability disclosure as a communication tool with stakeholders. We construct a continuous disclosure index for a sample of non-financial Italian listed firms in order to measure the effect of visibility to different types of stakeholders. We find that state-controlled firms are, overall, more prone to engage in sustainability disclosure than their counterparts. Further, we find that family, non-family and state-controlled firms respond significantly differently to the pressure of the various stakeholders. Previous research demonstrates that some ownership characteristics influence a firm's CSR disclosure but our study goes beyond addressing the issue of how the nature of its ultimate controlling owner shapes a firm’s response to stakeholder pressure. In so doing, we construct a continuous disclosure index for 10 years: previous studies have mainly analyzed a cross-sectional dataset and very few have constructed a disclosure index for up to five years.