Are CSR disclosures relevant for investors? Empirical evidence from Germany
Abstract
Purpose
The purpose of this paper is to examine whether narrative corporate social responsibility (CSR) disclosures (the provision of textual information on companies’ environmental and social performance to external stakeholders) are associated with firm value in Germany.
Design/methodology/approach
Based on the global reporting initiative guidelines, the paper uses content analysis to assess the value relevance of CSR disclosures of 130 German companies over four years.
Findings
The results show that CSR information is value-relevant, but the value relevance of CSR information differs among CSR categories. Specifically, the disclosure of social information is positively associated with firm value yet environmental disclosures are not.
Practical implications
The results confirm that management should be aware of the potential capital market effects of voluntary CSR disclosures, even though such disclosures may be directed at other stakeholders.
Originality/value
Germany is an interesting setting as CSR disclosures are voluntarily, even though the institutional environment appears sensitive to CSR disclosures. Despite this, little research has focussed upon the value-relevance of CSR-disclosures in Germany. In addition, the results confirm that management should be aware of the potential capital market effects of voluntary CSR disclosures, even though they are not directed at shareholders as such.
Keywords
Acknowledgements
A previous version of this paper has benefited from comments and suggestions by Peter Roosenboom as well as workshop participants at Rotterdam School of Management, Erasmus University; and University of Goettingen.
Citation
Verbeeten, F.H.M., Gamerschlag, R. and Möller, K. (2016), "Are CSR disclosures relevant for investors? Empirical evidence from Germany", Management Decision, Vol. 54 No. 6, pp. 1359-1382. https://doi.org/10.1108/MD-08-2015-0345
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited