In spite of the strategic importance of sustainability reporting in current business practice and the resulting increase in research on its value relevance, studies accounting for stakeholder interdependence are scarce. On the basis of the instrumental stakeholder theory, we investigate whether customers have an impact on the value relevance of sustainability reporting. Using a sample of US listed firms, we show that the value relevance of sustainability reporting is affected by customer profile differences, thereby confirming customer-shareholder interdependence. However, customer profile effects are only predominant if firms' profitability levels are low and disappear as profitability increases. Overall, our findings provide a more nuanced understanding of the value relevance of sustainability reporting. Therefore, we offer managers fine-grained guidance for value relevant sustainability reporting.

Prior studies on the relationship between culture and discretionary disclosure fail to account for concurrent managerial incentives to reveal private information to the capital market. Our study extends the literature by investigating whether these managerial incentives offset the cultural influence on managers’ discretionary disclosure decisions. To this end, we exploit a setting in which managers have the discretion to influence both the quantity and quality of disclosure and can thereby either conceal or reveal private information. For a sample of European firms, we find that despite incentives to reveal private information, managers’ culturally determined preference for secrecy leads them to provide a low quantity as well as a lower quality of disclosure. Our results are robust to several sensitivity checks and demonstrate the relative importance of cultural influence on discretionary disclosure decisions.

No abstract

No abstract

Culture matters for credible corporate social responsibility (CSR) reporting. I show that firms located in countries with stronger cultural rule orientation are more likely to (a) receive assurance on their CSR report, (b) receive assurance from an accounting firm, (c) receive assurance in accordance with an assurance standard, and (d) receive assurance on their entire CSR report. Path analysis reveals that the direct effect of cultural rule orientation is much stronger than its indirect effect via legal institutions. I confirm the dominance of the direct effect in a qualitative comparative analysis. The economic significance of the direct effect is identified using probit regression analysis. Endogeneity concerns are addressed in a battery of robustness checks. Overall, the findings of this study provide a nuanced understanding of how culture affects credible CSR reporting, which, in turn, has important implications for managers, stakeholders, and policy makers.