The Informational Contribution of Social and Environmental Disclosures for Investors

47 Pages Posted: 14 Jan 2009 Last revised: 17 Aug 2009

See all articles by Denis Cormier

Denis Cormier

University du Quebec a Montreal

Marie-Josée Ledoux

affiliation not provided to SSRN

Michel Magnan

Concordia University - Department of Accountancy

Date Written: April 2009

Abstract

Most prior research on corporate social responsibility (CSR) disclosure considers environmental and social components as additive or complementary. In this paper, we extend the existing literature on CSR by investigating the substitution effect of social disclosure and environmental disclosure in reducing information asymmetry between managers and investors. We also attempt to study the association between different environmental disclosure sources and information asymmetry. Environmental disclosure comes from three complementary sources: paper-based annual/environmental report, web page and press releases. Our results suggest that social disclosure and paper-based environmental disclosure substitute each other in reducing stock market asymmetry. We also show that environmental information communicated on the web page or by press releases does not affect information asymmetry when we consider social disclosure. These observations suggest that future research in CSR disclosure might fruitfully distinguish between social and environmental disclosure as well as communication devices. Moreover, as expected, we observe that environmental performance is negatively associated with environmental disclosure. Our results also show that environmental news exposure and firm size are key drivers of environmental disclosure.

Keywords: Social disclosure, governance attributes, environmental disclosure

JEL Classification: M41, M45, D82, Q20

Suggested Citation

Cormier, Denis and Ledoux, Marie-Josée and Magnan, Michel, The Informational Contribution of Social and Environmental Disclosures for Investors (April 2009). Available at SSRN: https://ssrn.com/abstract=1327044 or http://dx.doi.org/10.2139/ssrn.1327044

Denis Cormier

University du Quebec a Montreal ( email )

P.O. Box 8888, Downtown Station
Succursale Centre Ville School of Management 315 rue Ste-Catherine Est
Montreal, Quebec H3C 3P8
Canada
514-987-3000, ext. 8358 (Phone)
514-987-6629 (Fax)

Marie-Josée Ledoux (Contact Author)

affiliation not provided to SSRN ( email )

Michel Magnan

Concordia University - Department of Accountancy ( email )

Montreal, Quebec H3G 1M8
Canada

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
689
Abstract Views
2,742
rank
41,023
PlumX Metrics