Abstract
In recent years, as corporate social responsibility (CSR) has been drawing increasing public attention, the regulatory authorities in China have implemented a series of regulations and rules on the disclosure of CSR which have required listed companies to disclose CSR reports since 2008. This paper examines whether the disclosure of CSR-related information can provide useful information to investors. Specifically, we examine the impact of CSR disclosure on the accuracy and dispersion of analysts’ earnings forecasts. The results show that higher quality CSR disclosure by firms leads to smaller analysts’ earnings forecast errors and dispersion. The conclusions still hold after eliminating the endogenous concerns. In a further analysis, we find that the impact of CSR disclosure on the accuracy and dispersion of analysts’ earnings forecasts is stronger for firms which are ultimately controlled by private enterprises, located in regions with a good institutional environment, and in industries with high CSR concern. Collectively, our findings suggest that the disclosure of CSR-related information provides useful information to investors and decreases the degree of information asymmetry. Meanwhile, the relationship between CSR disclosure and forecast accuracy is also affected by the structure of corporate ownership, institutional environment, and industry characteristics.
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We appreciate the helpful comments from Dr Nancy Su (the executive editor) and the two anonymous reviewers. We acknowledge the financial support received from the Institute of Accounting and Finance at the Shanghai University of Finance and Economics (SHUFE), the National Natural Science Foundation of China (71202003, 71172144), the Institute Project of Humanities and Social Sciences of the Ministry of Education (11JJD790008, 11JJD790055), the Chenguang Project of Shanghai (11CG39), the PhD Innovation Foundation (CXJJ-2011-382), and the Outstanding Doctoral Dissertation Foundation of SHUFE. We thank Rankins CSR Ratings for providing us with the data on the CSR rating scores of Chinese listed companies. We are also grateful to participants in the 2012 Annual Academic Conference of Accounting Society of China and to all of the participants in the empirical accounting research seminars held at the School of Accountancy of SHUFE. Any errors are our own.
Xianjie He, Associate Professor, Institute of Accounting and Finance, Shanghai University of Finance and Economics; correspondence address: No.777, Guoding Road, Shanghai; email: he.xianjie@mail.shufe.edu.cn. Tusheng Xiao, Ph.D. Student, School of Accountancy, Shanghai University of Finance and Economics; email: tsh.xiao@yahoo.com.cn. Hongjun Zhu, Professor, Institute of Accounting and Finance, Shanghai University of Finance and Economics; email: hjzhu@mail.shufe.edu.cn.
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He, X., Xiao, T. & Zhu, H. Ownership Structure, Institutional Environment, and the Economic Consequences of Corporate Social Responsibility Information Disclosure: Evidence from Analysts’ Earnings Forecasts. China Account Financ Rev 15, 5 (2013). https://doi.org/10.7603/s40570-013-0005-8
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DOI: https://doi.org/10.7603/s40570-013-0005-8