Value Relevance of Stakeholder Engagement: The Influence of National Culture

Our study investigates whether stakeholder engagement is associated with a firm's valuation and the value relevance of accounting earnings. Since prior literature posits that the economic consequences of such practices may depend on the specific environment in which they are adopted, we also ex...

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Bibliographic Details
Published in:Corporate social-responsibility and environmental management 2017-01, Vol.24 (1), p.44-56
Main Authors: Dal Maso, Lorenzo, Liberatore, Giovanni, Mazzi, Francesco
Format: Article
Language:English
Subjects:
Accounting
cultural environment
culture
Earnings
Economics
embeddedness
hierarchy
mastery
national influence
stakeholder engagement
Stakeholders
Studies
value relevance
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Summary:Our study investigates whether stakeholder engagement is associated with a firm's valuation and the value relevance of accounting earnings. Since prior literature posits that the economic consequences of such practices may depend on the specific environment in which they are adopted, we also explore whether these associations are affected by the cultural traits of the country in which a firm operates. Based on a worldwide sample of firms for the period 2002 to 2014, we document that stakeholder engagement positively influences market‐to‐book value of equity, without enhancing the value relevance of firm's accounting earnings. Drawing on Schwartz's cultural framework, we show that the results hold only in countries with a low (high) level of embeddedness and hierarchy (mastery). Our study contributes to the literature exploring the economic consequences of non‐financial information and the importance of institutional characteristics for economic outcomes. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment
ISSN:1535-3958
1535-3966
DOI:10.1002/csr.1390