The COVID‐19 outbreak and the subsequent lockdown were an unanticipated shock to the global stock market. Managers also had minimal time to counterbalance its effect through corporate policies. Therefore, this health crisis offers a unique opportunity to examine the effect of corporate social responsibility (CSR) on shareholder value. We observe that firms engaged in more CSR activities outperform other firms. This suggests that CSR plays a positive role in determining shareholder value, particularly for an emerging market where minority shareholder rights are weak. Collaborating with our main finding, we further find that governance metrics play a significant role.

Purpose This paper aims to explore whether financial statement readability overcomes the information disadvantage of foreign equity investors. Design/methodology/approach A comprehensive data set of Indian firms listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) for 2007–2019 has been used to evaluate the proposed research questions. This study uses the Panel data method to investigate the research question. Findings The results reveal that readable financial statements attract foreign investments. The readability benefits are more noticeable for firms operating in less competitive industries and having poor earnings quality. Originality/value This study suggests that foreign investors facing informational disadvantages prefer firms with better readability as a substitute for informational acquisition, processing and monitoring.

Using a sample of the listed firms over the period 2007-2019, we examine the impact of financial statement readability on the earnings management in a large emerging economy, India. Besides, we test for the readability of financially distressed and financially constrained firms. We use the fog index to measure the readability of the Management Discussion and Analysis (MDA) section of the annual report, and earnings management is measured using the Jones model. Our results indicate that the firms practicing earning management activities prepare lesser readable financial reports. Our results remain the same after adding the firm-fixed effect to control for firm-specific characteristics. Thus, more financial manipulation practices by the firm make the financial reports more complex to comprehend.