scholarly journals Nonfinancial Disclosure and Analyst Forecast Accuracy: Evidences from CO2 Emission and Corporate Social Responsibility Disclosures in the US

2016 ◽  
Author(s):  
Lorenzo Dal Maso ◽  
William Rees
2012 ◽  
Vol 87 (3) ◽  
pp. 723-759 ◽  
Author(s):  
Dan S. Dhaliwal ◽  
Suresh Radhakrishnan ◽  
Albert Tsang ◽  
Yong George Yang

ABSTRACT We examine the relationship between disclosure of nonfinancial information and analyst forecast accuracy using firm-level data from 31 countries. We use the issuance of stand-alone corporate social responsibility (CSR) reports to proxy for disclosure of nonfinancial information. We find that the issuance of stand-alone CSR reports is associated with lower analyst forecast error. This relationship is stronger in countries that are more stakeholder-oriented—i.e., in countries where CSR performance is more likely to affect firm financial performance. The relationship is also stronger for firms and countries with more opaque financial disclosure, suggesting that issuance of stand-alone CSR reports plays a role complementary to financial disclosure. These results hold after we control for various factors related to firm financial transparency and other potentially confounding institutional factors. Collectively, our findings have important implications for academics and practitioners in understanding the function of CSR disclosure in financial markets. Data Availability: The data are publicly available from the sources identified in the paper.


2020 ◽  
Vol 45 (6) ◽  
pp. 865-891
Author(s):  
Lee Warren Brown ◽  
Irene Goll ◽  
Abdul A. Rasheed ◽  
Wayne S. Crawford

We examine how regulatory intensity and increases in regulation affect the nonmarket activities of firms. Using a signaling theory perspective, we seek to better understand how firms respond to regulation in terms of corporate social responsibility (CSR) and corporate political activity (CPA), the two main pillars of nonmarket activity. Examination of both CSR and CPA in concert rather than in isolation provides insights into whether they are complements or substitutes. We use textual analysis of the US Code of Federal Regulations to measure regulatory intensity and increases in regulation. Based on a sample of 331 S&P 500 firms for the period 1998–2014, our findings suggest that regulatory intensity leads to more nonmarket responses from firms. We also find support for nonlinear relationships between CSR and CPA.


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