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Article
Publication date: 4 March 2019

Jomo Sankara, Dennis M. Patten and Deborah L. Lindberg

This paper investigates the market response to the poor quality of reporting on the first mandated set of conflict minerals disclosures in the US setting. The authors…

Abstract

Purpose

This paper investigates the market response to the poor quality of reporting on the first mandated set of conflict minerals disclosures in the US setting. The authors examine the reaction for both filing firms at their filing date and non-filing companies at the filing deadline.

Design/methodology/approach

The authors use standard market model methods to capture investor response and test for differences across reactions using comparisons of means and regression models. The authors also code reports for a sub-sample of firms and test for the relation between disclosure and market reactions.

Findings

The authors document a significant negative reaction for both filing and non-filing firms, with the latter group suffering a more negative reaction than the filers. The authors also find more extensive disclosure is associated with less negative market reactions. Finally, the authors provide evidence supporting the argument that the more pronounced reaction for the non-filers is due to concerns with incremental implementation costs for these firms.

Research limitations/implications

The results extend prior research into investor perceptions of exposures to social and political costs. The findings suggest that investors view both poor quality disclosure and lack of response to mandated requirements as increasing such exposures.

Practical implications

The negative market response could be expected to exert additional pressures on companies to better assess and report on conflict mineral exposures in their supply chains.

Social implications

The findings suggest investors pay attention to the corporate response to mandated social disclosure requirements, an important finding as mandates for similar types of disclosure appear to be in the offing.

Originality/value

This study is the first to extend the social and political cost exposure literature to analysis of mandated social disclosures.

Details

Sustainability Accounting, Management and Policy Journal, vol. 10 no. 1
Type: Research Article
ISSN: 2040-8021

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Article
Publication date: 16 October 2017

Renata Blanc, Muhammad Azizul Islam, Dennis M. Patten and Manuel Castelo Branco

The purpose of this paper is to investigate whether differences in media exposure regarding corporate corruption appear to influence companies’ anti-corruption…

Abstract

Purpose

The purpose of this paper is to investigate whether differences in media exposure regarding corporate corruption appear to influence companies’ anti-corruption disclosures. The authors also examine whether the level of press freedom in firms’ home countries affects disclosure and the impact of media exposure in different ways.

Design/methodology/approach

The authors use Transparency International’s 2012 ratings of anti-corruption disclosure by the 105 largest multinational firms in the world, press freedom assessments from the non-governmental organization Reporters Without Borders, and media exposure measures based on a search using the Dow Jones Factiva database. The authors assess relations using regression analysis controlling for other firm-specific factors potentially impacting disclosure choices. Finally, the authors consider the potential effect of other country-level factors.

Findings

The results indicate that media exposure, using either an existence or an extensiveness measure, is positively related to differences in sample companies’ anti-corruption disclosures. The authors also find that disclosure is more (less) extensive where home country press freedom is less (more) restricted and that reduced press freedom appears to reduce the impact of media exposure on the disclosure. The authors further document that press freedom levels explain more difference in anti-corruption disclosures than other country-level factors potentially influencing the practice.

Research limitations/implications

Because the investigation is limited to very large international firms for a single year, the degree to which the findings apply to other companies and time periods cannot be assessed. Further, the authors cannot determine how the findings would hold using an alternative disclosure rating scheme. Finally, the authors do not assess whether differences in the source of media exposure impact the findings.

Social implications

The findings suggest that, to the extent that improved anti-corruption disclosure reflects greater corporate attention to corruption issues, the media may be a powerful player in addressing this social ill. Unfortunately, the results also indicate that media efforts may not be sufficient to bring about change in locations where the freedom of the press is limited. Further, the results suggest that disclosure appears to be a function of exposure to social and political exposures, and the authors therefore question whether it will actually lead to improved corruption performance.

Originality/value

The study is the first to consider the impacts of media exposure and press freedom on corporate social disclosures.

Details

Accounting, Auditing & Accountability Journal, vol. 30 no. 8
Type: Research Article
ISSN: 0951-3574

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Book part
Publication date: 14 May 2018

Kathleen Rehbein, Frank den Hond and Frank G. A. Bakker

Corporate social responsibility (CSR) and corporate political activity (CPA) are two important components of firms’ nonmarket strategies, oriented toward shaping the…

Abstract

Corporate social responsibility (CSR) and corporate political activity (CPA) are two important components of firms’ nonmarket strategies, oriented toward shaping the firm’s political and social conditions. Although this is acknowledged in the literature, there are contradictory arguments and evidence, concerning, first, whether and under which conditions firms align their CPA and CSR activities, and second, what the impacts might be if they do align these activities. In light of this, this chapter draws from earlier reviews of nonmarket strategies, to explore the factors at multiple levels, macro and micro, that may drive a firm’s alignment of CPA and CSR. In doing so, we draw from management research to identify the macro- and micro-level factors that shape CPA and CSR alignment as CSR and CPA alignment research mostly focuses on outcomes rather than identifying the drivers of alignment. We develop a general model that integrates the macro- and micro-level discussions to make suggestions about where future research needs to go to increase understanding of when corporations will combine their CPA and CSR efforts and the merits of these efforts.

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Article
Publication date: 31 May 2019

Dennis M. Patten

In this essay, the author reflects on the legitimacy theory in corporate social responsibility (CSR) disclosure research.

Abstract

Purpose

In this essay, the author reflects on the legitimacy theory in corporate social responsibility (CSR) disclosure research.

Design/methodology/approach

This is a reflection/review essay based on a review of relevant literature.

Findings

Although almost constantly under attack from a variety of scholars, legitimacy theory seems to hold on in the social and environmental disclosure arena. However, the failure of the recent wave of CSR-themed work published in The Accounting Review to even acknowledge, let alone engage with, the theory is problematic.

Research limitations/implications

We, in the CSR disclosure arena, need to do all we can to help emerging scholars (particularly in the USA) find the rich body of research the mainstream journals fail to discuss.

Practical implications

Legitimacy-based research can help move CSR disclosure at least closer to being a tool of accountability, as opposed to a tool for legitimation.

Social implications

Perhaps the critique of the mainstream North American literature’s failure to consider legitimacy theory can lead to the recognition of the need to focus on the harm to sustainability that a narrow, shareholder-centric focus leads to.

Originality/value

This reflection takes a unique look at the contributions of legitimacy theory to CSR disclosure research.

Details

Sustainability Accounting, Management and Policy Journal, vol. 11 no. 6
Type: Research Article
ISSN: 2040-8021

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Book part
Publication date: 20 September 2014

Amaka Okechukwu

Social movement scholarship points to the significance of collective identity in social movement emergence. This chapter examines the relationship between structural…

Abstract

Social movement scholarship points to the significance of collective identity in social movement emergence. This chapter examines the relationship between structural identities, such as race, gender, and sexuality, and the collective identity of student activist conferences in order to analyze how groups succeed or fail at engaging difference. Utilizing ethnographic participant observation at two student activist conferences – one of majority Black students and the other of majority white male students – this chapter employs an intersectional framework in analyzing the resonance of organizational collective action frames. This chapter finds that cultural resonance, frame centrality, and experiential commensurability are all important factors in engaging difference, and that the utilization of political intersectionality in framing may shape frame resonance. This framework that applies intersectionality to framing contributes to social movement analysis by recognizing how structural identities shape collective identity and group mobilization.

Details

Intersectionality and Social Change
Type: Book
ISBN: 978-1-78441-105-3

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Article
Publication date: 7 March 2016

Petros Vourvachis, Thérèse Woodward, David G. Woodward and Dennis M Patten

The purpose of this paper is to contribute to the literature investigating disclosure reactions to legitimacy threats by analyzing the corporate social responsibility…

Abstract

Purpose

The purpose of this paper is to contribute to the literature investigating disclosure reactions to legitimacy threats by analyzing the corporate social responsibility (CSR) disclosure reactions to catastrophic accidents suffered by major airlines.

Design/methodology/approach

The authors use content analysis to examine changes in annual report disclosure in response to four separate airline disasters. The authors adopt two classification schemes and two measurement approaches to explore these changes.

Findings

The authors find that for three events the organizations appear to have responded with considerable increases in CSR disclosure that are consistent with attempts of legitimation. For one of the events examined, the authors find no disclosure response and suggest that this could be due to the company’s unwillingness to accept responsibility.

Research limitations/implications

The study’s focus on major airlines that have suffered an accident with available annual reports in English meant that other companies had to be excluded from the analysis.

Practical implications

The findings demonstrate the use of the annual report as a legitimation tool and further highlight the need for greater transparency and comparability across publications.

Originality/value

The paper adds to the scarce literature examining corporate disclosure reactions following threats to their social legitimacy.

Details

Sustainability Accounting, Management and Policy Journal, vol. 7 no. 1
Type: Research Article
ISSN: 2040-8021

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Article
Publication date: 30 December 2020

Antonios Chantziaras, Emmanouil Dedoulis, Vassiliki Grougiou and Stergios Leventis

Corporate social responsibility (CSR) reporting has been theorized as a key communication device and an integral part of a broader stakeholder integration management…

Abstract

Purpose

Corporate social responsibility (CSR) reporting has been theorized as a key communication device and an integral part of a broader stakeholder integration management strategy. This paper aims to examine the relationship between CSR disclosures and organized labor, an important internal stakeholder, whose institutional role in dynamically advancing employee interests creates opportunities and challenges for strategic management and firm sustainability.

Design/methodology/approach

By using a sample of 2,526 US firm-year observations for the period 2002–2015, the authors demonstrate that managers in unionized contexts are more likely to issue CSR reports than managers in firms, where labor is not organized.

Findings

The authors demonstrate that managers in unionized contexts are more likely to issue CSR reports than managers in firms where labor is not organized. Considering stakeholder theory, they argue that, in unionized contexts, managers more intensively resort to CSR disclosures to form an alignment of interests, develop collaborative bonds with unions and smoothen relationships with external financial stakeholders. This effect is more prominent in areas where corporate spatial clustering and the prevailing political ideology facilitate the role of unions.

Research limitations/implications

First, the data refer to USA, which may limit the generalization of the results. Hence, researchers could use cross-country datasets to overcome this limitation. Second, it would be important to know what benefits are enjoyed by the unionized companies that issue CSR reports. Third, they acknowledge that there is useful qualitative information they do not analyze. This analysis could potentially relate specific CSR information to unions’ needs and demands. Further, there are alternative channels through which companies disclose relevant information such as 10-K filings, annual reports, firm websites, media, public announcements, etc. These are not captured by the data.

Practical implications

Managers could benefit from the empirical analysis, which suggests that through the initiation of CSR reports a dialogue with unions is greatly facilitated. Managers should consider that CSR reports reduce information asymmetries and may attract the interest of investors. Unionists should be aware that CSR reports constitute an opportunity to identify mutual interests and align goals. Business analysts, investors and shareholders should be aware that standalone CSR reports are used by managers to reduce information asymmetries and disparities with unions and to communicate an investment-friendly context. So, market participants should factor such policies by unionized firms into their investment analyses.

Social implications

The authors offer implications for managers, labor unionists and market participants.

Originality/value

This paper examines the relationship between CSR disclosures and organized labor, an important internal stakeholder, whose institutional role in dynamically advancing employee interests creates opportunities and challenges for strategic management and firm sustainability.

Details

Sustainability Accounting, Management and Policy Journal, vol. 12 no. 2
Type: Research Article
ISSN: 2040-8021

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Article
Publication date: 6 March 2017

Andrea Pérez and Carlos Lopez-Gutierrez

Supported by the principles of the legitimacy theory, the purpose of this paper is to explore the relationship that exists between the information quality of the corporate…

Abstract

Purpose

Supported by the principles of the legitimacy theory, the purpose of this paper is to explore the relationship that exists between the information quality of the corporate social responsibility (CSR) reporting provided by the most liquid companies operating in the Spanish Stock Market and their corporate reputation.

Design/methodology/approach

Three regression models are tested with panel data collected for a sample of the 35 most liquid companies operating in the Spanish Stock Market between 2004 and 2014.

Findings

The findings show that two axes of information quality (i.e. content and management systems) should be necessarily controlled by companies in order to improve their corporate reputation through their CSR reporting. The content axis refers to the compliance of CSR reports with the provision of qualitative, quantitative, and evaluative information concerning the impacts of the CSR of the company on society and the environment. The management systems axis refers to the compliance of CSR reports with the disclosure of details about the policies, plans, and actions that companies implement to assure an effective management of CSR initiatives.

Originality/value

Previous literature exploring the relationship between corporate reporting and reputation has frequently focused on either the impact of the quantity of financial and CSR information reported by companies and the role of information quality, but only in reference to a number of specific themes (environment, customers) and not to the full range of information covered by CSR reports. The authors of this paper extend on previous academic literature by empirically evaluating the relationship between two dimensions of the information quality of CSR reporting (content and management systems) and the corporate reputation of companies operating in the Spanish Stock Market.

Objetivo

Basándose en la teoría de la legitimidad, los autores de este trabajo exploran la relación que existe entre la calidad de la información contenida en las memorias de responsabilidad social corporativa (RSC) de las principales empresas cotizadas en la bolsa española y su reputación corporativa.

Diseño/metodología/enfoque

Se testean tres modelos de regresión con un panel de datos recopilados entre 2004 y 2014 para una muestra de las 35 empresas más sólidas de la bolsa española.

Resultados

Los resultados muestran que los dos ejes principales de la calidad de la información (es decir, contenido y sistemas de gestión) deben ser necesariamente controlados por las empresas con el fin de mejorar su reputación corporativa a través de sus memorias de RSC. El eje de contenido se refiere al cumplimiento de las memorias de RSC con el suministro de información cualitativa, cuantitativa y de evaluación en relación con los impactos de la RSC de la empresa en la sociedad y el medio ambiente. El eje de los sistemas de gestión se refiere al cumplimiento de las memorias de RSC con la divulgación de información acerca de las políticas, planes y acciones que las empresas implementan para asegurar una gestión eficaz de las iniciativas de RSC.

Originalidad/valor

La literatura previa que ha explorado la relación entre la información corporativa y la reputación se ha centrado con frecuencia en (1) el impacto de la cantidad de información financiera y de RSC que generan las empresas o (2) el papel de la calidad de la información, pero sólo en referencia a una serie de temas concretos (principalmente medio ambiente y clientes) y no a toda la gama de información cubierta por las memorias de RSC. Los autores de este trabajo amplían esta línea de investigación mediante la evaluación empírica de la relación entre dos dimensiones de la calidad de la información de las memorias de RSC (contenido y sistemas de gestión) y la reputación corporativa de las empresas que operan en la bolsa española.

Details

Academia Revista Latinoamericana de Administración, vol. 30 no. 1
Type: Research Article
ISSN: 1012-8255

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Article
Publication date: 17 September 2020

Rami Ibrahim A. Salem, Ernest Ezeani, Ali M. Gerged, Muhammad Usman and Rateb Mohammmad Alqatamin

This study aims to examine the influence of the quality of voluntary disclosure (QVD) on earnings management (EM) amongst a sample of commercial banks in the Middle East…

Abstract

Purpose

This study aims to examine the influence of the quality of voluntary disclosure (QVD) on earnings management (EM) amongst a sample of commercial banks in the Middle East and North Africa (MENA) region.

Design/methodology/approach

Using a sample of 1,060 bank-year observations for the period 2006–2015, this paper developed a three-dimensional framework to measure the QVD, which considers the quantity, spread and usefulness of the information. Furthermore, this study examines the QVD-EM nexus using an ordinary least squares regression model. This technique is supplemented with conducting an instrumental variable regression model and a two-stage least squares model to overcome the potential occurrence of endogeneity problems.

Findings

The findings suggest that QVD is negatively attributed to EM in the context of MENA banks. The findings also confirm that the quality of financial reporting is enhanced by QVD dimensions that were considered in the framework, leading banks to less engagement in EM practices. In contrast, the influence of the quantity dimension (level) of the disclosed information has an insignificant impact on EM, while the spread and usefulness dimensions of VD are negatively and significantly associated with EM in the region.

Research limitations/implications

Although the results are robust to various measurements and to the possible occurrence of endogeneity problems, there are a few limitations should be acknowledged, which provides opportunities for future research. For example, the sample size is relatively small due to data accessibility issues. Likewise, the findings of the research might not be appropriate for non-financial sectors. These limitations provide a good opportunity for future studies to expand on the research by covering other developing economies and, thereby, enriching the understanding offered by this study.

Practical implications

This study offers several implications for bank managers, academics and policymakers. Firstly, it may help managers to appreciate the function and the importance of QVD in mitigating EM. Secondly, for academics, the study provides suggestive evidence on the impact of QVD on EM; however, future research may need to consider the role of morality and ethical behaviour across different environments in reducing excessive risk-taking and constraining earnings manipulation. Finally, it provides insights for policymakers and regulators to develop a framework or guidance that can help banks in providing high-QVD in the context of developing economies.

Originality/value

The study distinctively develops an innovative measurement for QVD using a new multi-dimensional model. This paper also bring new evidence on QVD complexity and its impact on EM practice from an under-researched developing context, namely, the MENA region.

Details

International Journal of Accounting & Information Management, vol. 29 no. 1
Type: Research Article
ISSN: 1834-7649

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Article
Publication date: 26 January 2021

Rebecca Scheffauer, Manuel Goyanes and Homero Gil de Zúñiga

Traditionally, most readers' news access and consumption were based on direct intentional news seeking behavior. However, in recent years the emergence and popularization…

Abstract

Purpose

Traditionally, most readers' news access and consumption were based on direct intentional news seeking behavior. However, in recent years the emergence and popularization of social media platforms have enabled new opportunities for citizens to be incidentally informed about public affairs and politics as by-product of using these platforms. This article seeks to shed light on how socio-political conversation attributes may explain incidental exposure to information.

Design/methodology/approach

Drawing on US and UK survey data, the authors explore the role of political discussion and discussion network heterogeneity in predicting individuals' levels of incidental exposure to news. Furthermore, the authors also test the role of social media news use as a moderator. A hierarchical OLS regression analysis with incidental news exposure as dependent variable was conducted as well as analyses of moderation effects (heterogeneity*social media and political discussion*social media) using the PROCESS macro in SPSS.

Findings

Findings reveal that heterogeneous networks are positively related to incidental news exposure in the UK, while sheer level of political discussion is a positive influence over incidental news exposure in the US. Social media news use moderates the relationship between political discussion and incidental news exposure in the UK. That is, those who are highly exposed to news on social media and discuss less often about politics and public affairs, they tend to be incidentally exposed to news online the most. Meanwhile, the interaction of social media news and discussion heterogeneity showed significant results in the US with those exhibiting high levels of both also receiving the biggest share of INE.

Originality/value

This study contributes to closing research gaps regarding how and when people are inadvertently exposed to news in two Western societies. By highlighting that beyond the fate of algorithmic information treatment by social media platforms, discussion antecedents as well as social media news use play an integral part in predicting incidental news exposure, the study unravels fundamental conditions underlying the incidental news exposure phenomenon.

Details

Online Information Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1468-4527

Keywords

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