Purpose – This paper aims to test whether the publication of a social report provides information about the firm's market value. Its intention is to understand if investors believe the social report has a role equal to that traditionally attributed to accounting variables, i.e., whether the social report is value-relevant in assessing a firm's market value. Design/methodology/approach – This paper is deductive. It tests two main hypotheses: first, the social report is value relevant because it explains firm value; second, the social report influences the value-relevance of accounting variables. The study applies the value-relevance analysis on a sample of 178 Italian companies listed on the Milan Stock Exchange. Findings – The estimates show a significant negative correlation between the publication of a social report and the stock price. Furthermore, book value per share accounting information is more relevant for the companies that publish a social report, whereas the relevance of earnings per share does not change for these companies. Originality/value – This paper increases the understanding of the value that markets assign to the social report. It contributes to enriching the literature on the value-relevance analysis applied to non-financial variables and to social report in particular.
The value relevance of social reporting: evidence from listed Italian companies / Cardamone P.; Carnevale C.; Giunta F.. - In: JOURNAL OF APPLIED ACCOUNTING RESEARCH. - ISSN 0967-5426. - STAMPA. - 13(3):(2012), pp. 255-269. [10.1108/09675421211281326]
The value relevance of social reporting: evidence from listed Italian companies
GIUNTA, FRANCESCO
2012
Abstract
Purpose – This paper aims to test whether the publication of a social report provides information about the firm's market value. Its intention is to understand if investors believe the social report has a role equal to that traditionally attributed to accounting variables, i.e., whether the social report is value-relevant in assessing a firm's market value. Design/methodology/approach – This paper is deductive. It tests two main hypotheses: first, the social report is value relevant because it explains firm value; second, the social report influences the value-relevance of accounting variables. The study applies the value-relevance analysis on a sample of 178 Italian companies listed on the Milan Stock Exchange. Findings – The estimates show a significant negative correlation between the publication of a social report and the stock price. Furthermore, book value per share accounting information is more relevant for the companies that publish a social report, whereas the relevance of earnings per share does not change for these companies. Originality/value – This paper increases the understanding of the value that markets assign to the social report. It contributes to enriching the literature on the value-relevance analysis applied to non-financial variables and to social report in particular.File | Dimensione | Formato | |
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