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Effects of integrating CSR information in financial reports on investors’ firm value estimates
Author(s) -
Haji Abdifatah Ahmed,
Coram Paul,
Troshani Indrit
Publication year - 2021
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12713
Subject(s) - corporate social responsibility , credibility , business , value (mathematics) , enterprise value , accounting , finance , public relations , computer science , machine learning , political science , law
Using an experiment, we find that corporate social responsibility (CSR) performance measures have a greater impact on investors’ firm value estimates when reported in a separate report than when integrated into a financial report. We also find that more investors misclassified CSR information as assured when integrated into financial reports than when reported in separate reports. Investors who misclassified CSR information rated its credibility higher and derived higher firm value estimates compared to investors who correctly classified this information as non‐assured. Overall, our results identify potential costs of integrating CSR measures in financial reports, and inform global regulators considering alternative CSR reporting frameworks.