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The value relevance of corporate responsibility reporting: South African evidence

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  • Marna de Klerk
  • Charl de Villiers

Abstract

Purpose - Corporate responsibility reporting (CRR) deals with companies’ ethical, economic, environmental, and social impacts. The purpose of this paper is to contribute to the debate on whether CRR is associated with the information set that shareholders use to value a company's equity and therefore, the value‐relevance thereof for investment decision making. Design/methodology/approach - The paper uses a modified Ohlson model developed by Hassel, Nilsson and Nyquist to examine the role of CRR in providing information to shareholders that may affect their valuation of a company. The paper uses two data sets, namely a KPMG dataset on the CRR of the top 100 South African companies and the McGregor BFA database for financial data. Findings - It was found that the share prices of companies with higher levels of CRR are likely to be higher. Originality/value - Prior research in which different valuation methods and different assessment periods were used was conducted in different developed countries. Some studies show value relevance, while others do not. South Africa is a developing country and by bringing a developing country to the literature the authors’ aim is to contribute to the current debate on the value relevance of CRR.

Suggested Citation

  • Marna de Klerk & Charl de Villiers, 2012. "The value relevance of corporate responsibility reporting: South African evidence," Meditari Accountancy Research, Emerald Group Publishing Limited, vol. 20(1), pages 21-38, June.
    • Handle: RePEc:eme:medarp:v:20:y:2012:i:1:p:21-38
    DOI: 10.1108/10222521211234200
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    Citations

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    Cited by:

    1. Adriana HORAICU & Ana-Maria ANDREI & Laura-Andreea IAMANDACHE (FLOREA) & Victor MUNTEANU, 2023. "Non-Financial Reporting A Strategic Element In The Development Of Economic Entities," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 8(2), pages 37-48.
    2. Andrea Cardoni & Evgeniia Kiseleva & Simona Arduini & Simone Terzani, 2024. "From sustainable value to shareholder value: The impact of sustainable governance and anti‐corruption programs on market valuation," Business Strategy and the Environment, Wiley Blackwell, vol. 33(1), pages 19-42, January.
    3. Monday Nweke Igwe & Saleh F. A. Khatib & Ayman Hassan Bazhair, 2023. "Sustainability reporting in Africa: A systematic review and agenda for future research," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2081-2100, September.
    4. Zhongtian Li & Jing Jia & Larelle J. Chapple, 2022. "Textual characteristics of corporate sustainability disclosure and corporate sustainability performance: evidence from Australia," Meditari Accountancy Research, Emerald Group Publishing Limited, vol. 31(3), pages 786-816, February.
    5. Daniela Rupo & Nicola Rappazzo & Salvatore Loprevite & Giovanna Centorrino, 2024. "Does non-financial information matter? Mapping and clustering literature on the value relevance of comprehensive disclosure," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2024(2), pages 89-114.

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