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Do Customers Affect the Value Relevance of Sustainability Reporting? Empirical Evidence on Stakeholder Interdependence
Author(s) -
Goettsche Max,
Steindl Tobias,
Gietl Simon
Publication year - 2016
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.1856
Subject(s) - sustainability , relevance (law) , sustainability reporting , profitability index , business , stakeholder , value (mathematics) , shareholder value , empirical evidence , affect (linguistics) , marketing , stakeholder theory , shareholder , accounting , corporate governance , economics , finance , management , psychology , ecology , philosophy , communication , epistemology , machine learning , political science , computer science , law , biology
Abstract In spite of the strategic importance of sustainability reporting in current business practice and the resulting increase in research on its value relevance, studies accounting for stakeholder interdependence are scarce. On the basis of the instrumental stakeholder theory, we investigate whether customers have an impact on the value relevance of sustainability reporting. Using a sample of US listed firms, we show that the value relevance of sustainability reporting is affected by customer profile differences, thereby confirming customer–shareholder interdependence. However, customer profile effects are only predominant if firms' profitability levels are low and disappear as profitability increases. Overall, our findings provide a more nuanced understanding of the value relevance of sustainability reporting. Therefore, we offer managers fine‐grained guidance for value relevant sustainability reporting. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment