Nonfinancial Disclosure and Analyst Forecast Accuracy: Evidences from CO2 Emission and Corporate Social Responsibility Disclosures in the US

50 Pages Posted: 15 Jun 2016 Last revised: 21 Dec 2016

See all articles by Lorenzo Dal Maso

Lorenzo Dal Maso

affiliation not provided to SSRN

Bill Rees

University of Edinburgh - Accounting and Finance

Date Written: November 30, 2016

Abstract

We examine the association with analyst forecast quality of both CO2 emission disclosure and corporate social reporting for a sample of large US firms. Using a matched sample we find, for a one, two and three-year horizons, a significant reduction in error, bias and forecast dispersion and a significant improvement of the analysts’ information environment for those firms that disclose CO2 emissions. However, we confirm a significant negative association between corporate social responsibility reporting and forecast error only for a one-year horizon and bias for a one and two-year horizon. Previous work had demonstrated a significant negative association between forecast error and CSR disclosure for an international sample but not for the US. Our results suggest nonfinancial disclosure is relevant even in a liberal market economy with transparent financial reporting.  

Keywords: CO2 Emissions Disclosure, Financial Analysts Forecast Error, Forecast Bias, Forecast Dispersion, Corporate Social Reporting, Propensity score matching

JEL Classification: M41, M14, G14

Suggested Citation

Dal Maso, Lorenzo and Rees, William, Nonfinancial Disclosure and Analyst Forecast Accuracy: Evidences from CO2 Emission and Corporate Social Responsibility Disclosures in the US (November 30, 2016). Available at SSRN: https://ssrn.com/abstract=2795268 or http://dx.doi.org/10.2139/ssrn.2795268

Lorenzo Dal Maso (Contact Author)

affiliation not provided to SSRN

William Rees

University of Edinburgh - Accounting and Finance ( email )

29 Buccleuch Place
Edinburgh, EH8 9JS
United Kingdom
+44 131 651 5244 (Phone)

HOME PAGE: http://www.business-school.ed.ac.uk

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