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Information content of corporate social responsibility disclosures in Europe: An institutional perspective


Mittelbach-Hoermanseder, Stephanie; Hummel, Katrin; Rammerstorfer, Margarethe (2019). Information content of corporate social responsibility disclosures in Europe: An institutional perspective. SSRN 3365521, University of Zurich.

Abstract

For a sample of STOXX Europe-600 constituents and a reporting period of nine years, we investigate the role of the institutional environment on the value relevance of corporate social responsibility (CSR) disclosures in firms’ annual reports. Using textual analysis, we construct topic-specific disclosures measures that examine the prevalence of CSR topics with respect to the EU CSR directive, namely environmental, social and employee matters, human rights, and anti-corruption and bribery. The results reveal the value relevance of CSR disclosures, although the sign depends on the regulatory setting; it is positive before the issuance of the CSR directive and negative after it. Furthermore our results indicate that the incremental value relevance of topic-specific CSR disclosure is affected by the institutional environment, specifically, it is negatively related to country-level CSR awareness as well as employee protection and positively related to both, the legal strength and the level of enforcement. Our results also vary depending by the underlying topics.

Abstract

For a sample of STOXX Europe-600 constituents and a reporting period of nine years, we investigate the role of the institutional environment on the value relevance of corporate social responsibility (CSR) disclosures in firms’ annual reports. Using textual analysis, we construct topic-specific disclosures measures that examine the prevalence of CSR topics with respect to the EU CSR directive, namely environmental, social and employee matters, human rights, and anti-corruption and bribery. The results reveal the value relevance of CSR disclosures, although the sign depends on the regulatory setting; it is positive before the issuance of the CSR directive and negative after it. Furthermore our results indicate that the incremental value relevance of topic-specific CSR disclosure is affected by the institutional environment, specifically, it is negatively related to country-level CSR awareness as well as employee protection and positively related to both, the legal strength and the level of enforcement. Our results also vary depending by the underlying topics.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:4 April 2019
Deposited On:29 Jan 2020 11:43
Last Modified:29 Jan 2020 11:44
Series Name:SSRN
Number of Pages:76
ISSN:1556-5068
OA Status:Green
Free access at:Official URL. An embargo period may apply.
Official URL:https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3365521
Other Identification Number:merlin-id:19044

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