How Disclosure Features of Corporate Social Responsibility Reports Interact with Investor Numeracy to Influence Investor Judgments

Abstract

Firms' Corporate Social Responsibility (CSR) reports typically frame their strategies in terms of either community or global efforts (i.e., "strategy frame"). Further, the style used to depict CSR performance in reports often highlights either pictures or words (i.e., "presentation style"). These two prominent disclosure features of CSR reports promote a natural fit or misfit in the focus (relatively low-level or high-level focus) investors adopt when thinking about the firm and its CSR efforts. Further, these disclosure features likely have different effects on investors depending on their numeracy or, in other words, the way that they naturally process numerical information. In this study, we predict and find that a fit between the strategy frame and the presentation style of a firm's CSR report causes less numerate investors to be more willing to invest than when a fit is not present. Specifically, we find that a fit leads less numerate investors to experience subjective feelings of processing fluency and, in turn, positive affect that serves as a cue that the positive CSR performance information can be relied upon, which positively influences willingness to invest. Our results have implications for both CSR reports as well as other types of firm disclosures that increasingly vary along similar disclosure characteristics. Our results also contribute to both the growing literature on presentation effects in accounting, as well as the broader business literature on CSR reporting. favorisent une ad equation (ou une inad equation) naturelle entre l'objectif (plus ou moins elev e) auquel adh erent les investisseurs lorsqu'ils songent a l'entreprise et les efforts d eploy es par cette derni ere au chapitre de la RSE. Au surplus, ces caract eristiques de l'information sont susceptibles d'avoir une incidence diff erente sur les investisseurs selon la num eratie de ces derniers, c'est-a-dire la comp etence avec laquelle ils traitent spontan ement les informations num eriques. Les auteurs posent et confirment l'hypoth ese selon laquelle, en pr esence d'une ad equation entre le cadre strat egique et le style de pr esentation des rapports que produit une soci et e en mati ere de RSE, les investisseurs dont la comp etence num erique est inf erieure sont davantage dispos es a investir qu'en l'absence d'ad equation. Ils constatent plus particuli erement que la pr esence d'une ad equation am ene les investisseurs moins comp etents a eprouver une impression subjective de fluidit e de traitement et, par ricochet, un affect positif leur servant d'indicateur de fiabilit e de l'information positive quant a la performance en mati ere de RSE, ce qui influe favorablement sur leur disposition a investir. Les r esultats de l' etude ont des r epercussions tant sur les rapports qui emanent des soci et es en mati ere de RSE que sur leurs informations d'autre nature pr esentant des caract eristiques similaires mais dont les variantes ne cessent de se multiplier. Ces r esultats contribuent egalement a l'enrichissement des ecrits sur les con...

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