Real Effects of Disclosure Regulation: Evidence from the European Union's CSR Directive

Mandatory Sustainability Reporting in Germany: Does Size Matter?

“…In the case of Directive 2014/95/EU, this size effect is shown in a study by Venturelli et al [25], who demonstrate a positive correlation between firm size and extant reporting adequacy with regards to the Directive. Fiechter et al [24] show foremost that firms with low levels of CSR expenditures or no voluntary CSR reports increase their CSR expenditures more strongly than their peers after the introduction of EU Directive 2014/95, equally supporting the findings. Second, a larger firm size often also implies a larger resource base, and this has been found to positively impact environmental performance [59,94].…”

“…Researchers [3,22,23] and institutions [6] acknowledge the CDIA's effect on firms of different sizes, such as additional cost and possibly costly consultant work for directly affected firms, as well as an indirect effect on SMEs. However, to date, the discussion has remained largely hypothetical about actual consequences and vague about the impacts on firms of different sizes: for instance, studies take an accounting perspective or analyze financial reporting and examine the effects of (anticipated) mandatory reporting and the disclosure of sustainability issues on the firms concerned with engagement in CSR [24,25], while others consider firm CSR activities and the influences on firms' disclosure practices or other organizational processes [26,27], formalize CSR [20,28,29] or evaluate the effects and diffusion of voluntary sustainability reporting such as the Global Reporting Initiative (GRI) framework or International Organization for Standardization (ISO) standards on businesses [30][31][32][33][34].…”

Mandatory corporate social responsibility in India and its effect on corporate financial performance: Perspectives from institutional theory and resource‐based view

“…Hung, Shi, and Wang () had reported that mandatory CSR reporting firms experience a decrease in information asymmetry. Fiechter, Hitz, and Lehmann () found that large firms who had not voluntarily reported CSR before the CSR directive passed by the EU significantly increased their CSR expenditures after the passage of the CSR directive in 2014. Kapoor and Dhamija () reported that in India, after the amendment of the section 135 of the Companies Act 2013, there were desired results in the first year of 2014–2015, when the act was implemented with corporate India spending more than 74% of the mandated amount.…”

“…The study was designed to study the impact on both voluntary spenders and mandatory spenders. Fiechter et al () found that large firms who had not voluntarily reported CSR before the CSR directive passed by the EU significantly increased their CSR expenditures after the passage of the CSR directive in 2014. Hence our first hypothesis was.H1a CSR regulation under section 135 of the Companies Act 2013 has a positive impact on CSR intensity of mandatory spenders.H1b CSR regulation under section 135 of the Companies Act 2013 has a negative impact on CSR intensity of voluntary spenders.…”

Mandatory corporate social responsibility disclosure and dividend payouts: evidence from a quasi‐natural experiment

“…An increasing number of recent studies pay attention to the real economic impact of voluntary CSR disclosure. The previous literature indicates that voluntary CSR disclosure has the merits of reducing information asymmetry and cost of capital (Dhaliwal et al ., , , ), while mandatory CSR disclosure has implications for mine‐safety records, environmental impacts, and CSR expenditure (Christensen et al ., ; Gramlich and Huang, ; Fiechter et al ., ). Our paper is closely related with two recent studies focusing on the economic impacts of the mandatory CSR disclosure regulation in China.…”