Validated Signalling: How Ownership Structure Enhances ESG Disclosure Credibility in an Emerging Market

ABSTRACT While signalling theory predicts that ESG disclosure reduces information asymmetry and supports forward‐looking firm valuation, this relationship remains contested in emerging markets with concentrated ownership. Using a panel of 84 Turkish listed firms over 2014–2024 (924 firm‐years) and two‐step system GMM, we examine whether business groups, institutional blockholders and family blockholders differ in how strongly they condition the ESG–valuation relationship. Results indicate that ownership types differentially condition the valuation relevance of ESG disclosure. The estimated interaction effects are largest for business group affiliation (β = 0.438), followed by institutional blockholders (β = 0.325) and family blockholders (β = 0.193), consistent with differences in governance capacity. Business group and institutional blockholder validation is associated with reduced information asymmetry through narrower bid‐ask spreads, lower stock illiquidity and lower cost of equity, while family blockholders show no significant asymmetry effects. Ownership moderation strengthens 79%–171% as Turkey's ESG regime evolved from voluntary to harmonised reporting, consistent with institutional complementarity. Robustness checks using Heckman selection, IV‐2SLS, Driscoll–Kraay inference and a 2018‐crisis placebo support these patterns. Ownership characteristics may serve as a supplementary credibility cue for ESG disclosure in concentrated‐ownership environments where formal verification mechanisms remain underdeveloped.