Are CSR Disclosures Value Relevant? Cross-Country Evidence

By S. Cahan, C. de Villiers, Debra C. Jeter, Vic Naiker, C. V. Van Staden. 2013

428 citations recorded by the source corpus.

Abstract Using proprietary data that rate corporate social responsibility (CSR) disclosures of firms in 21 countries, this study examines how the strength of nation-level institutions affects the extent of CSR disclosures. We then examine the valuation implications of CSR disclosures and consider how the relation between CSR disclosures and firm value varies across countries. In contrast to prior studies, we separate CSR disclosures into an expected and unexpected portion where the unexpected portion is a proxy for the incremental information contained in CSR disclosures. We observe a positive relation between unexpected CSR disclosure and firm value measured by Tobin's Q. We also find that, while countries with strong nation-level institutions promote more CSR disclosures, the valuation of a unit increase in unexpected CSR disclosures is higher when nation-level institutions are weak.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/349b4116f20e0affc36001c95272b91858aba02b

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Citations in the corpus

ESG practices and the cost of debt: Evidence from EU countries (2019, background): “Firms use the substantive approach to pose themselves in the market as being committed to a strong ESG performance and distinguish themselves from poor ESG performers (Cahan, De Villiers, Jeter, Naiker, & Van Staden, 2016).”
Corporate social responsibility disclosure and market value: Family versus nonfamily firms (2017, methodology): “Third, given that it takes a longer time for the effects of superior CSR performance and its disclosure to translate into higher market value (Cahan et al., 2016), our paper adopts a long-term study period of 10 years, from 2001 to 2010, allowing us to improve the robustness of the empirical…”
Disclosure on the Sustainable Development Goals – Evidence from Europe (2021, neutral): “, 2003) as well as of CSR disclosure (Cahan et al., 2016; De Villiers &Marques, 2016; Dhaliwal et al., 2011; Mittelbach-Hörmanseder et al., 2020).”
Islamic Governance, National Governance, and Bank Risk Management and Disclosure in MENA Countries (2017, methodology): “Our estimation is based on the emerging theoretical and empirical evidence (Aguilera, 2005; Aguilera et al., 2008; Alon & Dwyer, 2014; Cahan et al., 2015; Ernstberger & Grüning, 2013; Essen et al., 2013), which suggests that the impact of the IGQ on RDPs can be enhanced in countries with higher NGQ.”
Impact of disclosure and assurance quality of corporate sustainability reports on access to finance (2019, background): “This tension not only exists regarding quality and quantity but also about firm's initiative to whether disclose such information or not (Cahan et al., 2016).”
The contents of assurance statements for sustainability reports and information asymmetry (2017, background): “…world governance indicators: (1) the ability of a country’s citizens to select their government and voice their concerns (Voice), and (2) the quality of public services, policy formulation and implementation (Government) (Cahan et al. 2016, Guenther et al. 2016, de Villiers and Marques 2016).”
CSR disclosure and financial performance revisited: A cross-country analysis (2018, background): “While the sample size is relatively small, this is quite typical of studies in this field, particularly for cross-country studies (Cahan et al., 2016).”