Determinants and Economic Consequences of Non-financial Disclosure Quality. Issue 2 (2nd April 2016)

• Record Type: Journal Article
• Authors: Gao, Fang; Dong, Yi; Ni, Chenkai; Fu, Renhui
• Is Part Of: European accounting review. Volume 25:Issue 2(2016)
• Page Start: 287
• Page End: 317
• Publication Date: 2016-04-02
• Subjects: Accounting -- Europe -- Periodicals; Accounting -- Periodicals; Comptabilité -- Europe -- Périodiques; Comptabilité -- Pays de l'Union européenne -- Périodiques; 657.094
• DOI: 10.1080/09638180.2015.1013049
• Languages: English
• ISSNs: 0963-8180

Abstract

Abstract: This paper examines the determinants and economic consequences of non-financial disclosure quality, which is measured according to the ratings of corporate social responsibility (CSR) disclosure provided by the Ministry of Economic Affairs in the Netherlands. We find that firms with better CSR performance, greater external financing needs, and stronger corporate governance tend to provide higher quality CSR disclosures. In return, these firms gain greater analyst coverage, higher levels of institutional ownership, greater stock liquidity, higher valuations in SEOs, and lower yields to maturity in bond issuances. These benefits apply largely to firms with strong CSR performance. Collectively, our findings suggest that higher quality CSR disclosures deliver economic benefits.