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The purpose of this paper is to investigate if human capital information voluntarily provided by German companies is value‐relevant.

By means of word‐based content analysis, human capital information is extracted from German companies’ annual reports. Subsequently, the value relevance of the disclosed human capital information is analyzed by applying two established valuation models.

The results show that human capital information is value‐relevant. Especially, information on qualification and competence issues is positively associated with firm value. Nonetheless, the disclosed information does not lead to short‐term changes in market value. Consequently, human capital information is value‐relevant but not immediately.

First, companies can improve their valuation on the capital market by disclosing information on their human capital. Second, standard setters can use this paper's results in defining relevant information categories for human capital disclosures. Third, the amount of human capital disclosures is increasing over time.

This study explicitly evaluates the value relevance of the overall (especially nonfinancial) human capital information voluntarily provided in corporate annual reports.

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.

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.

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.

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.

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.

Enhanced business reporting (EBR) seeks to address the information needs of investors when making company valuations for investment decisions. The purpose of this paper is to analyze the relevance for market valuation of EBR disclosures that are directly related to firm valuation (value-based reporting (VBR)).

Data are hand collected from annual reports of German publicly listed companies over five years. The content analysis is based on the valuation-related disclosure framework of the German Schmalenbach Society of Business Administration. A 2SLS approach accounts for potential endogeneity.

Share-based compensation, leverage, corporate size, and share volatility are significant determinants of VBR. The level of VBR is significantly associated with market values and provides additional market value explanatory power, indicating its relevance to investors in the process of valuation and decision making. Also, the relevance of book value and earnings for explaining market values increases for firms with better VBR. The findings are robust to the exclusion of banks and assurance companies and to alternative model and variable specifications.

The research contributes to the literature on voluntary disclosures by testing an EBR framework explicitly derived from valuation theory. The results provide indirect evidence of the investors’ use of respective valuation techniques in decision making. A contribution is made to the value relevance literature by showing that valuation-related disclosures constitute a suitable proxy for “other information” in the Ohlson’s (1995) model. Such disclosures complement traditional accounting metrics, i.e. book value and earnings, as basis for valuations. Potential caveats relate to the content analysis of annual reports and the endogeneity of voluntary disclosures.

This paper informs the debate on further developments of EBR in helping to identify important components thereof.