Effect of target-and-incentive-consistency of unexpected positive earnings news on investors’ responses to corporate social responsibility performance

Lei Wang

Pacific Accounting Review, 2019, vol. 31, issue 1, 63-83

Abstract: Purpose - This study examines the effect of target-and-incentive-consistency of unexpected positive earnings news on investors’ use of corporate social responsibility (CSR) performance information in their pricing decisions. Design/methodology/approach - A 2 × 2 full factorial between-participants experiment is conducted. Findings - Target-and-incentive-consistency of unexpected positive earnings news moderates the effect of CSR performance on investors’ pricing decisions. Research limitations/implications - Its findings shed insights on investors’ use of a mix of CSR, financial and governance information, support the financial information elasticity effect and add to the effect of financial information on investors’ use of nonfinancial information. Practical implications - The effect of inelastic financial information in mitigating the CSR information effect can benefit investors who do not plan to use a CSR investment strategy. Knowledge of investors’ conditional use of CSR information can benefit firm managers and policy makers. Originality/value - Its findings support a heretofore unexamined theoretical underpinning for the effect of financial information on investors’ use of nonfinancial information.

Keywords: Corporate social responsibility performance information; Financial information elasticity effect; Governance mechanism over financial performance; Management target and incentives (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:parpps:par-09-2017-0072

DOI: 10.1108/PAR-09-2017-0072

Access Statistics for this article

Pacific Accounting Review is currently edited by Professor Tom Scott, Dr Pei-Chi Kelly Hsiao, Associate Professor Chelsea Liu, Associate Professor Sophia Su, Associate Professor Thu Phuong Truong and Dr Lily Chen

More articles in Pacific Accounting Review from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support (feeds@emerald.com).