This study examines the impact of Sustainability reporting and the voluntary adoption of Corporate Sustainability Report Assurance (CSRA) on firm financial performance using two measures of financial performance: a market-based and an accounting-based. To measure market-based performance, we use Tobin’s Q as a proxy, whereas to measure accounting-based performance, we use Return on Assets (ROA) and Return on Equity (ROE) as proxies. The sample of this research consisted of 959 listed European firms (or 8,164 firm year observations). The period under investigation covers 10 years from 2010 until 2020. The results show that Sustainability Report issuers tend to have better financial performance measured by accounting figures, but not by market valuation. Furthermore, voluntary CSR assurance adoption of the firms is related positively with financial performance, making CSR assurance a competitive advantage of firms to gain legitimacy to the public.
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