Evaluating the impact of non-financial disclosure on the capital structure: A focused analysis of the EURO STOXX 50 in the context of the NFRD

Abstract

This thesis explores the impact of non-financial disclosures mandated by the Non-Financial Reporting Directive (NFRD) on the capital structures of companies listed in the EURO STOXX 50. The research addresses a significant gap in understanding how these disclosures influence corporate financial strategies, particularly in terms of leverage. Utilizing a structured approach, the study employs panel data analysis on data collected from 39 companies of the EURO STOXX 50. The findings suggest that mandatory CSR reporting leads to a potential shift towards lower leverage in the short term while leverage seems to slightly increase in the long term. These insights underscore the importance of non-financial disclosures in shaping corporate financial strategies and provide critical implications for policymakers and stakeholders in the context of evolving EU regulatory frameworks. The study contributes to the theoretical framework of the Trade-Off theory, offering new perspectives on the strategic implications of CSR reporting.