Effects of Integrating CSR Information in Financial Reports on Investors’ Firm Value Estimates
Accounting and Finance, Forthcoming
47 Pages Posted: 5 Jan 2019 Last revised: 12 Oct 2020
Date Written: December 21, 2018
Using an experiment, we find that corporate social responsibility (CSR) performance measures have a greater impact on investors’ firm value estimates when reported in a separate report than when integrated into a financial report. We also find that more investors misclassified CSR information as assured when integrated into financial reports than when reported in separate reports. Investors who misclassified CSR information rated its credibility higher and derived higher firm value estimates compared to investors who correctly classified this information as non-assured. Overall, our results identify potential costs of integrating CSR measures in financial reports, and inform global regulators considering alternative CSR reporting frameworks.
Keywords: Corporate Social Responsibility Disclosure; Integrated Reporting; Nonprofessional Investors; Firm Value Estimates
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