Voluntary Nonfinancial Disclosure and the Cost of Equity Capital: The Initiation of Corporate Social Responsibility Reporting

Dhaliwal, Dan S.; Li, Oliver Zhen; Tsang, Albert; Yang, Yong

doi:10.2139/ssrn.1687155

Cited by 715 publications

(1,351 citation statements)

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“…• capital market transactions, by reducing the cost of capital-e.g., [35][36][37]; • corporate control, by affecting the managers' turnover-e.g., [38,39]; • stock-based compensation plans, by correcting potential undervaluation-e.g., [40]; • development of litigation hypotheses, in turn impacting on the disclosure behaviors-e.g., [41,42]; • managers' recognition, spreading their talent-e.g., [43]; • competition in product markets, which is the only hypothesis assuming the absence of conflict of interest between management and ownership-see [13,44].…”

Section: Corporate Disclosure and Capital Markets: A Brief Literaturementioning

confidence: 99%

Corporate Disclosure, Materiality, and Integrated Report: An Event Study Analysis

2017

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Within the extensive literature investigating the impacts of corporate disclosure in supporting the sustainable growth of an organization, few studies have included in the analysis the materiality issue referred to the information being disclosed. This article aims to address this gap, exploring the effect produced on capital markets by the publication of a recent corporate reporting tool, Integrated Report (IR). The features of this tool are that it aims to represent the multidimensional impact of the organization's activity and assumes materiality as a guiding principle of the report drafting. Adopting the event study methodology associated with a statistical significance test for categorical data, our results verify that an organization's release of IR is able to produce a statistically significant impact on the related share prices. Moreover, the term "integrated" assigned to the reports plays a significant role in the impact on capital markets. Our findings have beneficial implications for both researchers and practitioners, adding new evidence for the IR usefulness as a corporate disclosure tool and the effect of an organization's decision to disclose material information.

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Section: Corporate Disclosure and Capital Markets: A Brief Literaturementioning

confidence: 99%

Corporate Disclosure, Materiality, and Integrated Report: An Event Study Analysis

2017

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“…Richardson and Welker (2001) analyze the incremental cost of equity capital effects of voluntary social disclosures and find a positive relationship, even though financially successful firms seem to be penalized less for social disclosures. Dhaliwal et al (2011), on the other hand, establish a negative association between corporate social responsibility (CSR) disclosure and cost of equity capital. They also find that firms tend to exploit this effect by raising equity capital after initiating CSR activities.…”

Section: Literature Reviewmentioning

confidence: 99%

“…We therefore opt for cross-sectional regression analysis, following the major body of literature represented, amongst others, by Botosan (1997), Leuz and Verrecchia (2000), Hail (2002), Daske (2006), Glaum et al (2011), or Dhaliwal et al (2011. ''Appendix 2'' provides a detailed overview of all variables surveyed with respect to our sample and lists the relevant data sources.…”

Section: Empirical Modelmentioning

confidence: 99%

“…On the one hand, our results suggest the acquisition of private benefits if firms use the management report for communicating strategy information to investors. For example, in line with Dhaliwal et al (2011), firms can augment their level of strategy disclosure to enhance market value, e.g., in advance of an intended increase of equity capital. Even though our study does not deal with the specific content of firms' strategies, but only with the level of comprehensiveness of strategy disclosure per se, our results indicate that firms which communicate their strategy more thoroughly on average enjoy advantages with respect to cost of equity capital, compared to firms that tend to conceal their intended strategies.…”

Section: Introductionmentioning

confidence: 99%

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Let’s talk strategy: the impact of voluntary strategy disclosure on the cost of equity capital

Sieber

Weißenberger

Oberdörster

et al. 2014

Bus Res

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This paper deals with the impact of voluntary strategy disclosure in management reports on the cost of equity capital. Such an impact is not obvious, as investors might consider strategy information as “cheap talk” and therefore ignore it. We analyze a sample of 100 German listed firms from 2002 to 2008, measuring strategy disclosure levels using hand-collected strategy disclosure scores. We find that higher disclosure levels are, on average, associated with lower cost of equity capital even after controlling for overall disclosure quality. The paper contributes to the field by providing evidence that voluntary strategy disclosures in firms’ management reports reduce the information asymmetry component of cost of capital and therefore can be considered as a relevant source of information for investors.

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“…Además, divulgar voluntariamente las actividades de RSC demuestra la confianza de las empresas en su desempeño en RSC, que envía una señal positiva a los inversionistas, o, en el caso del desempeño pobre de RSC, permite a las empresas ofrecer explicaciones. Por lo tanto, las declaraciones de RSC contienen información más allá que la contenida en los índices de desempeño de la RSC (Dhaliwal et al, 2010).…”

Section: Instrumentos De Medición Y Modelos De Responsabilidad Socialunclassified

Por qué no existe un instrumento de medición de la responsabilidad social corporativa único, globalmente aceptado?

Muñoz¹,

Longobardi

2012

cys

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Resumen: En las últimas décadas el mundo de los negocios internacionales ha experimentado un interés cada vez más creciente sobre el tema de la Responsabilidad Social Corporativa (RSC), a pesar de que este tema ha estado bajo el escrutinio de la academia por más de sesenta años, aun no se logra consenso en puntos tan fundamentales como la definición del concepto mismo. De igual modo, con el trascurrir del tiempo distintos autores han introducido nuevos términos, para referirse al mismo concepto, muchas veces utilizándolos indistintamente. Conjuntamente con la proliferación de definiciones y términos han surgido distintos mecanismos para medir la RSC lo que ha dificultado la comparabilidad entre los indicadores alcanzados por unas empresas y otras, y entre las empresas de uno u otro país. El siguiente artículo tiene como objetivo revisar la literatura sobre el tema de los instrumentos de medición de la Responsabilidad Social Corporativa e identificar las causas por las cuales no existe un único instrumento de medición globalmente aceptado.

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Voluntary Nonfinancial Disclosure and the Cost of Equity Capital: The Initiation of Corporate Social Responsibility Reporting

Cited by 715 publications

References 0 publications

Corporate Disclosure, Materiality, and Integrated Report: An Event Study Analysis

Corporate Disclosure, Materiality, and Integrated Report: An Event Study Analysis

Let’s talk strategy: the impact of voluntary strategy disclosure on the cost of equity capital

Por qué no existe un instrumento de medición de la responsabilidad social corporativa único, globalmente aceptado?

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