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

See all articles by Abdifatah Ahmed Haji

Abdifatah Ahmed Haji

Deakin University

Paul Coram

University of Adelaide - Business School; Financial Research Network (FIRN)

Indrit Troshani

University of Adelaide - Business School

Date Written: December 21, 2018

Abstract

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

Suggested Citation

Haji, Abdifatah Ahmed and Coram, Paul J. and Troshani, Indrit, Effects of Integrating CSR Information in Financial Reports on Investors’ Firm Value Estimates (December 21, 2018). Accounting and Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3305020 or http://dx.doi.org/10.2139/ssrn.3305020

Abdifatah Ahmed Haji (Contact Author)

Deakin University ( email )

1 Gheringhap Street
Geelong
Victoria 3220
Australia

Paul J. Coram

University of Adelaide - Business School ( email )

10 Pulteney Street
Adelaide, South Australia 5005
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Indrit Troshani

University of Adelaide - Business School ( email )

10 Pulteney Street
Adelaide, South Australia 5005
Australia
+61883135526 (Phone)

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