Corporate Social Responsibility Assurance and Value-Relevance of CSR around the World

Lan Jin*

*Corresponding author for this work

Research output: Contribution to conferenceConference paperpeer-review

Abstract

This study uses a multi-country setting in the period of 2002-2018 to examine whether and how voluntary environmental, social, and governance (ESG) sustainability assurance interacts with ESG reporting to affect firm value. We find that ESG assurance improves the value relevance of ESG after controlling for the effect of ESG reporting and other determinants. In terms of economic significance, with assured ESG reports, an increase in ESG score by one standard deviation is associated with an increase in firm value by 3.98%. The result remains unaffected after addressing endogeneity concerns using several methods (i.e., difference-in-difference, Heckman’s two-stage, and propensity score matching). Our cross-sectional analyses reveal that ESG assurance strongly increases the value relevance of ESG in situations where legal institutions are weaker, the information environment is less transparent, or societies do not value ESG. Our findings provide policy, practice, and research implications by presenting evidence that ESG assurance plays a positive credibility-enhancing role for firms’ ESG reporting.
Original languageEnglish
Publication statusPublished - 11 Aug 2022
Event2022 American Accounting Association Virtual Annual Meeting -
Duration: 11 Aug 202212 Aug 2022
https://aaahq.org/portals/0/documents/annualmeeting/2022/2022_AM_Virtual_Program.pdf (Conference program (virtual program))
https://aaahq.org/Meetings/2022/Annual-Meeting (Conference website)

Conference

Conference2022 American Accounting Association Virtual Annual Meeting
Period11/08/2212/08/22
Internet address

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