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Corporate Social Responsibility Report Narratives and Analyst Forecast Accuracy
Journal of Business Ethics (2017)
  • Volkan Muslu, Bauer College of Business
  • Sunay Mutlu, Kennesaw State University
  • Suresh Radhakrishnan, The University of Texas at Dallas
  • Albert Tsang, Schulich School of Business
Standalone corporate social responsibility (CSR) reports vary considerably in the content of information released due to their voluntary nature. In this study, we develop a disclosure score based on the tone, readability, length, and the numerical and horizon content of CSR report narratives, and examine the relationship between the CSR disclosure scores and analyst forecasts. We find that CSR reporters with high disclosure scores are associated with more accurate forecasts, whereas low score CSR reporters are not associated with more accurate forecasts than firms who do not issue CSR reports. The findings are robust to controlling for firm characteristics including CSR activity ratings and financial narratives. The findings are driven by experienced CSR reporters rather than first-time CSR reporters. Together, our findings suggest that the content of CSR reports helps to improve analyst forecast accuracy, and this relationship is more pronounced for CSR reports with more substantial content.

  • Corporate social responsibility reporting,
  • Textual disclosures,
  • Analyst forecasts
Publication Date
January 3, 2017
Citation Information
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