Online from: 1999
Subject Area: Accounting and Finance
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|Title:||The importance of corporate environmental reputation to investors|
|Author(s):||Khaled Hussainey, (Stirling Management School, University of Stirling, Stirling, UK), Aly Salama, (Durham Business School, Durham University, Durham, UK)|
|Citation:||Khaled Hussainey, Aly Salama, (2010) "The importance of corporate environmental reputation to investors", Journal of Applied Accounting Research, Vol. 11 Iss: 3, pp.229 - 241|
|Keywords:||Corporate social responsibility, Earnings, Investors, Stock returns, United Kingdom|
|Article type:||Research paper|
|DOI:||10.1108/09675421011088152 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
Purpose – The purpose of this paper is to explore how corporate environmental reputation (CER) affects the association between current annual stock returns and current and future annual earnings. In particular, it seeks to examine the potential usefulness of CER to investors in predicting future earnings.
Design/methodology/approach – The paper uses the returns-earnings regression model introduced by Collins
Findings – The paper finds that firms with higher levels of CER scores exhibit higher levels of share price anticipation of earnings than firms with lower levels of CER scores.
Originality/value – This paper is the first direct evidence that CER contains value-relevant information. Such information is potentially useful to investors in anticipating future earnings.
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