Mandatory CSR disclosure and analyst forecast properties: Evidence from a quasi-natural experiment in China

Haina Shi, Byron Y. Song, Huifeng Xu*, Xiaodong Xu

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

Abstract

Based on a quasi-natural experiment that mandates a subset of listed firms to issue standalone corporate social responsibility (CSR) reports, we examine whether mandatory CSR disclosure improves analysts’ information environment. We focus on two properties of analysts’ earnings forecasts: forecast error and forecast dispersion. We find that the mandatory issuance of standalone CSR reports is related to less forecast error and less dispersed forecasts, and the effect varies with the firm-level information environment and province-level marketization. Additional tests show that the improvement in forecast properties is mainly driven by CSR reports that i) are of high quality and ii) contain more long-term-oriented information than other CSR reports. Our findings provide evidence that mandatory CSR disclosure plays an important informational role for financial analysts.

Original languageEnglish
Article number100301
Number of pages24
JournalChina Journal of Accounting Research
Volume16
Issue number2
DOIs
Publication statusPublished - Jun 2023

Scopus Subject Areas

  • Accounting
  • Finance

User-Defined Keywords

  • Analyst forecast
  • Corporate social responsibility
  • Mandatory disclosure

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