Are CSR Disclosures Value Relevant? Cross-Country Evidence |
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| Authors: | Steven F Cahan Charl De Villiers Debra C Jeter Vic Naiker |
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| Institution: | 1. Department of Accounting and Finance, University of Auckland, Auckland, New Zealand;2. Department of Accounting, Auckland University of Technology, Auckland, New Zealand;3. Department of Accounting, University of Pretoria, Pretoria, South Africa;4. Owen Graduate School of Management, Vanderbilt University, Nashville, TN, USA;5. Department of Accounting, Monash University, Melbourne, Australia |
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| 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. |
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