Currently, companies spend a great deal of effort on Corporate Social Responsibility (CSR) disclosures. CSR disclosure relates to the provision of information on companies' environmental and social performance. From an economic perspective, companies might disclose this information to avoid or decrease potential political costs. We construct a CSR disclosure index based on the Global Reporting Initiative (GRI) guidelines. Using content analysis, we analyze 130 listed German companies' CSR disclosures (470 firm-year observations) to investigate the determinants of these voluntary disclosure activities. Our results show that, consistent with the political cost theory, German companies' disclosures of all CSR issues are affected by their visibility, shareholder structure, and relationship with their US stakeholders. In addition, higher profitability is associated with more environmental disclosures. Finally, size and industry membership affect the amount of CSR disclosure.

Purpose – The purpose of this paper is to examine whether narrative corporate social responsibility (CSR) disclosures (the provision of textual information on companies’ environmental and social performance to external stakeholders) are associated with firm value in Germany. Design/methodology/approach – Based on the global reporting initiative guidelines, the paper uses content analysis to assess the value relevance of CSR disclosures of 130 German companies over four years. Findings – The results show that CSR information is value-relevant, but the value relevance of CSR information differs among CSR categories. Specifically, the disclosure of social information is positively associated with firm value yet environmental disclosures are not. Practical implications – The results confirm that management should be aware of the potential capital market effects of voluntary CSR disclosures, even though such disclosures may be directed at other stakeholders. Originality/value – Germany is an interesting setting as CSR disclosures are voluntarily, even though the institutional environment appears sensitive to CSR disclosures. Despite this, little research has focussed upon the value-relevance of CSR-disclosures in Germany. In addition, the results confirm that management should be aware of the potential capital market effects of voluntary CSR disclosures, even though they are not directed at shareholders as such.

PurposeThe purpose of this paper is to investigate if human capital information voluntarily provided by German companies is value‐relevant.Design/methodology/approachBy means of word‐based content analysis, human capital information is extracted from German companies’ annual reports. Subsequently, the value relevance of the disclosed human capital information is analyzed by applying two established valuation models.FindingsThe results show that human capital information is value‐relevant. Especially, information on qualification and competence issues is positively associated with firm value. Nonetheless, the disclosed information does not lead to short‐term changes in market value. Consequently, human capital information is value‐relevant but not immediately.Practical implicationsFirst, companies can improve their valuation on the capital market by disclosing information on their human capital. Second, standard setters can use this paper's results in defining relevant information categories for human capital disclosures. Third, the amount of human capital disclosures is increasing over time.Originality/valueThis study explicitly evaluates the value relevance of the overall (especially nonfinancial) human capital information voluntarily provided in corporate annual reports.

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