The information content of corporate social responsibility disclosure in Europe

An institutional perspective

Bibliographic Data

ID19447281
AuthorsStéphanie Mittelbach-Hörmanseder (Department of Accounting, Finance & Statistics, Institute for Accounting & Auditing, WU Vienna, Vienna, Austria), Stéphanie Mittelbach‐Hörmanseder (Vienna University of Economics and Business, corresponding author), Katrin Hummel (0000-0001-5685-4863, University of Zurich), Margarethe Rammerstorfer (0000-0001-9927-2329, Department of Accounting, Finance & Statistics, Institute for Finance, Banking and Insurance, WU Vienna, Vienna, Austria)
Year2021
Volume30
Issue2
Pages309-348
Publication date2021-03-15
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEuropean Accounting Review (JOURNAL)
Journal identifiersISSN: 0963-8180 • E-ISSN: 1468-4497
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/09638180.2020.1763818
OpenAlexW3027817637
LanguageEN
Citations received8
References cited95

This study examines how firm value (measured via stock prices) is related to corporate social responsibility (CSR) disclosure and how the institutional environment influences this relationship. To test our hypotheses, we apply textual analysis to our data on firms listed in the STOXX Europe 600 for the period 2008–2016. Our investigation of topic-specific CSR disclosure indicates that when firms shifted from voluntary to mandatory reporting, following the announcement of Directive 2014/95/EU, the association between their share price and CSR disclosure became significantly negative. For the period before the announcement, this relationship is either positive or statistically insignificant. We also show that the institutional environment can impact this relationship in four distinct ways: the level of CSR awareness, the level of employee protection, the degree of enforcement and the strength of the legal environment. We find that the first two have a negative impact on the incremental value relevance of specific CSR disclosure, whereas the last two have a positive impact. Lastly, our results also indicate that the magnitude of (a) the relationship between a firm’s CSR disclosure and its value and (b) the impact that the firm’s institutional environment has on this relationship depends on the specific CSR topics

Business · Content analysis · Corporate social responsibility · Directive · Enforcement · Enterprise value · Political science · Positive relationship · Public relations · Stock price · Auditing, Earnings Management, Governance · Corporate Finance and Governance · Corporate Social Responsibility Reporting · Law · Psychology · Social Psychology · Accounting

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