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The informational contribution of social and environmental disclosures for investors

Denis Cormier (ESG UQÀM, Montreal, Canada)
Marie‐Josée Ledoux (ESG UQÀM, Montreal, Canada)
Michel Magnan (John Molson School of Business, Concordia University, Montreal, Canada)

Management Decision

ISSN: 0025-1747

Article publication date: 6 September 2011




The aim of the paper is to investigate whether social disclosure and environmental disclosure have a substituting or a complementing effect in reducing information asymmetry between managers and stock market participants


This study attempts to provide a comprehensive analysis of a firm's social and environmental disclosure strategy. The authors posit that this strategy simultaneously affects information asymmetry and disclosure.


Findings suggest that social disclosure and environmental disclosure substitute each other in reducing stock market asymmetry.

Research limitations/implications

The measurement of social and environmental disclosure is based upon a coding instrument that makes some explicit assumptions about the value and relevance of information. Moreover, information asymmetry cannot be directly measured and is inferred from the behaviour of proxy variables such as share price volatility and bid‐ask spread.

Practical implications

Results suggest that social disclosure reinforces the informativeness of environmental disclosure for stock markets, even substituting for it under certain conditions. Stakeholders must assess and retain an increasing flow of information: a more efficient disclosure strategy becomes critical if firms want to convey the right picture of their CSR performance.


To the best of the authors' knowledge, this is the first study to explore the joint effect of social disclosure and environmental disclosure in reducing information asymmetry.



Cormier, D., Ledoux, M. and Magnan, M. (2011), "The informational contribution of social and environmental disclosures for investors", Management Decision, Vol. 49 No. 8, pp. 1276-1304.



Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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