Information Content of Corporate Social Responsibility Disclosures in Europe: An Institutional Perspective

Mittelbach-Hoermanseder, Stephanie; Hummel, Katrin; Rammerstorfer, Margarethe

doi:10.2139/ssrn.3365521

Cited by 4 publications

(3 citation statements)

References 79 publications

(214 reference statements)

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“…In order to test our hypothesis, we rely on four topic-specific disclosure, namely discl_education, discl_philanthropy, discl_parental and discl_climate. To identify how explicit voluntary CSR disclosure addresses the predefined topics, we apply textual analysis and follow Mittelbach-Hoermanseder, Hummel & Rammerstorfer (2019) and apply the methodology of Hoberg & Maksimovic (2015) who identified degrees of financial constraint based on textual analysis.…”

Section: Topic-specific Disclosure Measuresmentioning

confidence: 99%

Implicit Versus Explicit Corporate Social Responsibility Disclosure: A Textual Analysis

Hummel

Mittelbach‐Hörmanseder²,

Cho

et al. 2017

SSRN Journal

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In this paper, we investigate whether companies located in liberal market economies report more explicitly about specific CSR topics than firms located in coordinated market economies. For a sample of 3,384 CSR reports of European and US firms, we perform a textual analysis over the period 2008 -2016. Our results confirm that companies located in LMEs report more explicitly about education and philanthropy; for parental leave and climate, we find a negative and significant association. We also find that CSR performance, size and report length are positively associated with the explicitness of our topic-specific CSR disclosure scores. Our results are robust to a variety of alternative measures. EXPLICIT CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE:A TOPIC-BASED APPROACH disclosure to specific industries, cross-national differences are less likely considered.However, our study results suggest that the institutional setting not only affects the explicitness of topic-specific CSR disclosure but also differs depending on the CSR topic under consideration. Therefore, our contribution to the literature is threefold.First, to the best of our knowledge, the current study is the first to apply an explicit topic-based approach to the measurement of CSR disclosure. The fact that CSR is composedby its nature -of different topics is not considered when conducting CSR disclosure research based only on (often dichotomized) levels of disclosure. Interestingly, most of the empirical and large-sample evidence focuses on levels of CSR disclosure. Thus, our textual measure of CSR topics accounts for this caveat and allows for a more accurate representation of CSR.

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Section: Topic-specific Disclosure Measuresmentioning

confidence: 99%

Implicit Versus Explicit Corporate Social Responsibility Disclosure: A Textual Analysis

Hummel

Mittelbach‐Hörmanseder²,

Cho

et al. 2017

SSRN Journal

Self Cite

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“…The tone is seen as a composition of words that, when accumulated, start to produce standardized expectations, expressing to the recipients something important about the author's perspective (Fisher et al 2019). In other words, the tone refers to the attitude of the text, while readability is the ease with which the reader can capture the message of the text (Mittelbach-Hoermanseder et al 2020). In this conception, the tone is a lexical element that involves words to create social expressions, attributing a certain connotation to the narrative, often called textual feeling (Gatzert and Heidinger 2019).…”

Section: The Tone Of the Speechmentioning

confidence: 99%

The Relationship between the Company’s Value and the Tone of the Risk-Related Narratives: The Case of Portugal

2021

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The present study aims to identify the impact of the tone of risk reporting narratives on company market value. The paper uses a sample of 34 Portuguese non-finance companies with shares traded at the Euronext Lisbon stock exchange market. The paper conducts an automated content analysis of the risk reporting narratives included in the risk and risk management sections of the annual reports for 2018 by using the software DICTION 7 (Digitext, Inc., Austin, TX, USA) to retrieve the speech tone. Main findings indicate that the tone category “activity” is associated negatively with the company’s market value. This result shows that investors misprice risk information that incorporates traces of overconfidence, narcissistic self-confidence and heroic leadership. The present study extends prior literature by analyzing the economic incentives of the tone of risk reporting narratives, not yet studied. Findings are both relevant to investors to support their decision-making processes and managers to strategically manage their risk communication tactics and benefit from the advantages emanated from them. Limitations related to the research setting do not undermine the generalization of findings because the automated algorithm provided by DICTION assures the content analysis’s reliability. The sample used corresponds to the population of the Portuguese non-finance listed companies.

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“…Compared to traditional approaches for measuring CSR disclosure-such as content analysis and ratings from external data providers-textual analysis enables researchers to analyse large amounts of text based on objective and replicable techniques. With the increase in computing power, textual analysis is increasingly used in CSR disclosure research (Hummel & Rotzel, 2019;Melloni, Caglio, & Perego, 2017;Mittelbach-Hoermanseder, Hummel, & Rammerstorfer, 2019;Muslu, Mutlu, Radhakrishnan, & Tsang, 2019;Nazari, Hrazdil, & Mahmoudian, 2017).…”

Section: Textual Analysis and Measuresmentioning

confidence: 99%

Stock Market Reactions and CSR Disclosure in the Context of Negative CSR Events

Hummel¹,

Mittelbach‐Hörmanseder²,

Rammerstorfer³

et al. 2019

SSRN Journal

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This paper analyses stock market reactions after the occurrence of major negative corporate social responsibility (CSR) events and the possibility of mitigating these effects through the upfront provision of CSR information in firms' annual reports. For this purpose, we follow a three-step procedure. First, we analyse the major concerns gathered from REPRisk® data via event study analysis. Herein, we cover a window of 5 to 20 days. Second, we analyse all annual reports of the firms mentioned in the covered period over the entire time horizon and conduct a textual analysis to examine firms' disclosure of CSR information. Finally, we draw conclusions from the two approaches and show that firms with more upfront CSR information suffer from stronger negative market reactions after the occurrence of a negative CSR event. Herein, we show that if the occurrence of a negative CSR event conflicts with investors' expectations, then it leads to an important update of investors' beliefs about firms' prospects. Our results also confirm that such an event leads to an adjustment of the subsequent year's CSR disclosure in the annual reports.

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Information Content of Corporate Social Responsibility Disclosures in Europe: An Institutional Perspective

Cited by 4 publications

References 79 publications

Implicit Versus Explicit Corporate Social Responsibility Disclosure: A Textual Analysis

Implicit Versus Explicit Corporate Social Responsibility Disclosure: A Textual Analysis

The Relationship between the Company’s Value and the Tone of the Risk-Related Narratives: The Case of Portugal

Stock Market Reactions and CSR Disclosure in the Context of Negative CSR Events

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