The Informational Contribution of Social and Environmental Disclosures for Investors
AbstractCorporations increasingly define their social and environmental initiatives and activities as part of their Corporate Social Responsibility (CSR). Disclosure practices have followed suit as well with social and environmental information typically being combined, often through a CSR report. The emergence of CSR is a response to the demands of activist investors, ethical and green institutional investors as well as rating services (e.g., Jantzi) which evaluate corporations through the lens of CSR, thus going beyond traditional environmental indicators. However, is this trend beneficial to investors? We investigate whether social disclosure and environmental disclosure substitute or complement each other in reducing information asymmetry between managers and investors, taking into account a firm‟s environmental performance and governance attributes. Our findings suggest that social disclosure and environmental disclosure substitute each other in reducing stock market asymmetry, as proxied by share price volatility. Our results also show that the reduction in share price volatility is higher for economic (hard) environmental disclosure than for generic (soft) environmental disclosure. Hence, future research in CSR disclosure may fruitfully distinguish between social and environmental disclosures as well as between hard (economic-based) and soft environmental information.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HAL in its series Post-Print with number hal-00481571.
Date of creation: 2010
Date of revision:
Publication status: Published - Presented, Crises et nouvelles problématiques de la Valeur, 2010, Nice, France
Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00481571/en/
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
Environmental disclosure; governance attributes; information asymmetry; social disclosure.;
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chung, Kee H. & Jo, Hoje, 1996. "The Impact of Security Analysts' Monitoring and Marketing Functions on the Market Value of Firms," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 31(04), pages 493-512, December.
- Hartog,Joop & Maassen van den Brink,Henriëtte (ed.), 2009. "Human Capital," Cambridge Books, Cambridge University Press, number 9780521117562, October.
- Abagail McWilliams & Donald S. Siegel & Patrick M. Wright, 2005.
"Corporate Social Responsibility: Strategic Implications,"
Rensselaer Working Papers in Economics
0506, Rensselaer Polytechnic Institute, Department of Economics.
- Abagail McWilliams & Donald S. Siegel & Patrick M. Wright, 2006. "Corporate Social Responsibility: Strategic Implications," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 1-18, 01.
- Ziegler, Andreas & Schröder, Michael, 2010. "What determines the inclusion in a sustainability stock index?: A panel data analysis for european firms," Ecological Economics, Elsevier, vol. 69(4), pages 848-856, February.
- Neu, D. & Warsame, H. & Pedwell, K., 1998. "Managing public impressions: environmental disclosures in annual reports," Accounting, Organizations and Society, Elsevier, vol. 23(3), pages 265-282, April.
- David Pastoriza & Miguel AriÃ±o & Joan Ricart, 2008. "Ethical Managerial Behaviour as an Antecedent of Organizational Social Capital," Journal of Business Ethics, Springer, vol. 78(3), pages 329-341, March.
- Bushman, Robert & Chen, Qi & Engel, Ellen & Smith, Abbie, 2004. "Financial accounting information, organizational complexity and corporate governance systems," Journal of Accounting and Economics, Elsevier, vol. 37(2), pages 167-201, June.
- Christian Leuz, 2003. "IAS Versus U.S. GAAP: Information Asymmetry-Based Evidence from Germany's New Market," Journal of Accounting Research, Wiley Blackwell, vol. 41(3), pages 445-472, 06.
- Al-Tuwaijri, Sulaiman A. & Christensen, Theodore E. & Hughes, K. II, 2004. "The relations among environmental disclosure, environmental performance, and economic performance: a simultaneous equations approach," Accounting, Organizations and Society, Elsevier, vol. 29(5-6), pages 447-471.
- Wiseman, Joanne, 1982. "An evaluation of environmental disclosures made in corporate annual reports," Accounting, Organizations and Society, Elsevier, vol. 7(1), pages 53-63, January.
- Roberts, Robin W., 1992. "Determinants of corporate social responsibility disclosure: An application of stakeholder theory," Accounting, Organizations and Society, Elsevier, vol. 17(6), pages 595-612, August.
- Darren T. Roulstone, 2003. "The Relation Between Insider-Trading Restrictions and Executive Compensation," Journal of Accounting Research, Wiley Blackwell, vol. 41(3), pages 525-551, 06.
- Luzi Hail & Christian Leuz, 2006. "International Differences in the Cost of Equity Capital: Do Legal Institutions and Securities Regulation Matter?," Journal of Accounting Research, Wiley Blackwell, vol. 44(3), pages 485-531, 06.
- Mills, Dixie L. & Gardner, Mona J., 1984. "Financial profiles and the disclosure of expenditures for socially responsible purposes," Journal of Business Research, Elsevier, vol. 12(4), pages 407-424, December.
- Aerts, Walter & Cormier, Denis, 2009. "Media legitimacy and corporate environmental communication," Accounting, Organizations and Society, Elsevier, vol. 34(1), pages 1-27, January.
- Williams, S. Mitchell & Ho Wern Pei, Carol-Anne, 1999. "Corporate social disclosures by listed companies on their web sites: an international comparison," The International Journal of Accounting, Elsevier, vol. 34(3), pages 389-419, 08.
- Lenzen, Manfred & Dey, Christopher J. & Murray, Shauna A., 2004. "Historical accountability and cumulative impacts: the treatment of time in corporate sustainability reporting," Ecological Economics, Elsevier, vol. 51(3-4), pages 237-250, December.
- Patten, Dennis M., 1991. "Exposure, legitimacy, and social disclosure," Journal of Accounting and Public Policy, Elsevier, vol. 10(4), pages 297-308.
- Ali Fekrat, M. & Inclan, Carla & Petroni, David, 1996. "Corporate environmental disclosures: Competitive disclosure hypothesis using 1991 annual report data," The International Journal of Accounting, Elsevier, vol. 31(2), pages 175-195.
- Scott Shane & Daniel Cable, 2002. "Network Ties, Reputation, and the Financing of New Ventures," Management Science, INFORMS, vol. 48(3), pages 364-381, March.
- Aerts, Walter & Cormier, Denis & Magnan, Michel, 2008. "Corporate environmental disclosure, financial markets and the media: An international perspective," Ecological Economics, Elsevier, vol. 64(3), pages 643-659, January.
- Clarkson, Peter M. & Li, Yue & Richardson, Gordon D. & Vasvari, Florin P., 2008. "Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis," Accounting, Organizations and Society, Elsevier, vol. 33(4-5), pages 303-327.
- Robert E. Verrecchia & Christian Leuz, 1999. "The Economic Consequences of Increased Disclosure," Working Paper Series: Finance and Accounting 41, Department of Finance, Goethe University Frankfurt am Main.
- Eng, L. L. & Mak, Y. T., 2003. "Corporate governance and voluntary disclosure," Journal of Accounting and Public Policy, Elsevier, vol. 22(4), pages 325-345.
- Barbara Pirchegger & Alfred Wagenhofer, 1999. "Financial information on the Internet: a survey of the homepages of Austrian companies," European Accounting Review, Taylor & Francis Journals, vol. 8(2), pages 383-395.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.