Corporate Disclosure, Market Valuation, and Firm Performance

Jiao, Yawen

doi:10.1111/j.1755-053x.2011.01156.x

Cited by 77 publications

(39 citation statements)

References 46 publications

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“…Tobin's Q is used as a measure of firm value and the dependent variable. This is because it has widely been used in prior research [99,100] as a measure of long term performance. Scholars [101] have noted that firm value incorporates both a firm's future cash flow and the assessed inherent risk reflects in the cost of capital.…”

Section: Measurement Of Variables and Model Specificationmentioning

confidence: 99%

Disclosure of CSR Performance and Firm Value: New Evidence from South Africa on the Basis of the GRI Guidelines for Sustainability Disclosure

et al. 2018

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Prior CSR and firm performance research has produced mixed results. Even so, numerous researches examining this relationship from the perspective of international standardisation have primarily concentrated on developed economics. This leaves an obvious gap within the extant literature with regards to evidence from sub-Saharan Africa. The aim of this study is to investigate the relationship between the extent of CSR disclosure performance and firm value, in an emerging institutional setting. Using hand collected data of South African listed companies, we apply the GRI G3.1 guidelines, as a measure of disclosure performance. Based on the panel data fixed effect model, we document a positive but insignificant relationship between CSR disclosure performance and firm value. Secondly, a negative and insignificant relationship was found between environmental disclosure performance and firm value. Lastly, we found a positive and statistically significant relationship between social disclosure performance and firm value. Overall, our findings suggest that CSR disclosure has a limited effect on firm value. Our findings hold for a set of robustness tests. Our findings suggest that the incorporation of sustainability disclosure, on the basis of GRI, is moderately high among the selected companies. Implications of our results suggest that CSR disclosure may not necessarily influence firm value, despite its numerous benefits. We contribute to this line of research from a multi-theoretical perspective.

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Section: Measurement Of Variables and Model Specificationmentioning

confidence: 99%

Disclosure of CSR Performance and Firm Value: New Evidence from South Africa on the Basis of the GRI Guidelines for Sustainability Disclosure

et al. 2018

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“…John, Litov, and Yeung () find that the firm's potential to create wealth significantly affects its market value and conclude that investors not only demand their wealth to be protected from expropriation but also expect their wealth to be increased. Therefore, firms in strong investor protection environments actually have no choice but to attempt to create wealth by engaging in investments that would entice potential investors (Cheung, Stouraitis, & Tan, ; Jiao, ). They would especially have to pursue long‐term investments, which are usually more uncertain and/or risky.…”

Section: National Governance Bundles: Combining Internal and Externalmentioning

confidence: 99%

Structuring Corporate Boards for Wealth Protection and/or Wealth Creation: The Effects of National Institutional Characteristics

Kim¹,

Ozdemir²

2014

Corporate Governance

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Manuscript Type Empirical Research Questions/Issue This study examines variation among firms in different countries in terms of how corporate boards are structured for effective governance. We discuss the fiduciary role of boards along two dimensions: (1) boards as wealth protectors and (2) boards as wealth creators. We explore how external governance mechanisms affect the emphasis placed on these two board role dimensions. Research Findings/Insights Using data from 23 countries and 19 industries, we show that board structure choices depend upon national institutional characteristics. Specifically, Investor Protection, Rule of Law, and Open Markets institution act as complements or substitutes to how a board is structured to emphasize two different aspects of corporate governance. The results hold while controlling for firm, industry, and other country level effects. Theoretical/Academic Implications We offer a more nuanced understanding of the linkages between internal/firm and external/institution level governance mechanisms by studying them in tandem. Our results imply that external governance mechanisms within a nation alter the costs and benefits of designing boards for a certain fiduciary role. This finding contributes to the governance bundles literature by articulating how governance mechanisms from both firm and nation levels configure together to form national governance bundles. Practitioner/Policy Implication As opportunities and constraints differ by country due to distinct institutional characteristics, firms varyingly structure their boards in accordance with the environment. They emphasize stronger wealth protection and/or wealth creation, or neither. This paper contributes to public policy by presenting how corporate laws and de/regulating markets may affect board structure choices.

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“…Kanter, 2011). Following Daske, Hail, Leuz, and Verdi (2008), Doidge, Karolyi, and Stulz (2004), Jiao (2011), andLang, Lins, andMiller (2004), we rely on Tobin's Q to measure the market's assessment of a firm's long-term expected value. Tobin's Q includes the market's assessment of a firm's future cash flows and the riskiness of those cash flows.…”

Section: Introductionmentioning

confidence: 99%

Are CSR Disclosures Value Relevant? Cross-Country Evidence

Cahan¹,

Villiers²,

Jeter³

2013

SSRN Journal

184

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Using proprietary data that rate corporate social responsibility (CSR) disclosures of firms in 21 countries, this study examines how the strength of nation-level institutions affects the extent of CSR disclosures. We then examine the valuation implications of CSR disclosures and consider how the relation between CSR disclosures and firm value varies across countries. In contrast to prior studies, we separate CSR disclosures into an expected and unexpected portion where the unexpected portion is a proxy for the incremental information contained in CSR disclosures. We observe a positive relation between unexpected CSR disclosure and firm value measured by Tobin's Q. We also find that, while countries with strong nation-level institutions promote more CSR disclosures, the valuation of a unit increase in unexpected CSR disclosures is higher when nation-level institutions are weak.

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Corporate Disclosure, Market Valuation, and Firm Performance

Cited by 77 publications

References 46 publications

Disclosure of CSR Performance and Firm Value: New Evidence from South Africa on the Basis of the GRI Guidelines for Sustainability Disclosure

Disclosure of CSR Performance and Firm Value: New Evidence from South Africa on the Basis of the GRI Guidelines for Sustainability Disclosure

Structuring Corporate Boards for Wealth Protection and/or Wealth Creation: The Effects of National Institutional Characteristics

Are CSR Disclosures Value Relevant? Cross-Country Evidence

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