The Impact of Accounting Disclosure of Sustainable Performance on Stock Price Crash Risk: The Mediating Role of Information Asymmetry An Empirical Study on Companies Listed on the Egyptian Stock Exchange

The research aims to analyze the relationship between accounting disclosure of sustainable performance and the Stock Price Crash Risk in the Egyptian business environment, with a focus on testing the mediating role of information asymmetry in this relationship. The study also seeks to provide a deeper understanding of how accounting disclosure- particularly regarding environmental, social, and governance (ESG) aspects- affects financial market stability and investor confidence. Moreover, it aims to determine whether disclosure of such practices contributes to reducing information asymmetry between management and investors, thereby lowering the likelihood of sudden stock price crashes. This analysis is applied to a sample of companies listed on the Egyptian Stock Exchange during the period 2020–2023.
The study found a significant negative impact of the level of sustainable performance disclosure on stock price crash risk, and a mediating role of information asymmetry in the relationship between sustainable performance disclosure and stock price crash risk. To assess the robustness and consistency of the results obtained through the primary analysis, robustness tests were conducted. These included the use of alternative measures for stock price crash risk in listed companies, and a re-examination of the mediation relationship under study. The results of the robustness tests confirmed the strength and reliability of the study’s primary analysis and models, highlighting the significant influence of the level of accounting disclosure of sustainable performance on the stock price crash risk, and affirming the mediating role of information asymmetry in this relationship.