Marie-Josée Ledoux

The informational contribution of social and environmental disclosures for investors

Purpose – The aim of the paper is to investigate whether social disclosure and environmental disclosure have a substituting or a complementing effect in reducing information asymmetry between managers and stock market participantsDesign/methodology/approach – This study attempts to provide a comprehensive analysis of a firms social and environmental disclosure strategy. The authors posit that this strategy simultaneously affects information asymmetry and disclosure.Findings – Findings suggest that social disclosure and environmental disclosure substitute each other in reducing stock market asymmetry.Research limitations/implications – The measurement of social and environmental disclosure is based upon a coding instrument that makes some explicit assumptions about the value and relevance of information. Moreover, information asymmetry cannot be directly measured and is inferred from the behaviour of proxy variables such as share price volatility and bid‐ask spread.Practical implications – Results suggest...

Corporate governance and information asymmetry between managers and investors

Purpose – The purpose of this paper is to investigate the impact of governance on information asymmetry between managers and investors. Hence, the paper seeks to extend prior voluntary disclosure research.Design/methodology/approach – The paper investigates how a firms governance maps into the level of information asymmetry between managers and investors. Governance encompasses two complementary dimensions: formal monitoring attributes and voluntary disclosure about board processes. Information asymmetry is measured by either share price volatility or Tobins Q.Findings – The results show that some formal monitoring attributes (board and audit committee size) as well as the extent of voluntary governance disclosure reduce information asymmetry. This suggests that governance disclosure may complement a firms governance monitoring attributes, especially in a country such as Canada where investors have good legal protection. It appears also that firms take into account ultimate costs and benefits to shareh...

The Informational Contribution of Social and Environmental Disclosures for Investors

Most prior research on corporate social responsibility (CSR) disclosure considers environmental and social components as additive or complementary. In this paper, we extend the existing literature on CSR by investigating the substitution effect of social disclosure and environmental disclosure in reducing information asymmetry between managers and investors. We also attempt to study the association between different environmental disclosure sources and information asymmetry. Environmental disclosure comes from three complementary sources: paper-based annual/environmental report, web page and press releases. Our results suggest that social disclosure and paper-based environmental disclosure substitute each other in reducing stock market asymmetry. We also show that environmental information communicated on the web page or by press releases does not affect information asymmetry when we consider social disclosure. These observations suggest that future research in CSR disclosure might fruitfully distinguish between social and environmental disclosure as well as communication devices. Moreover, as expected, we observe that environmental performance is negatively associated with environmental disclosure. Our results also show that environmental news exposure and firm size are key drivers of environmental disclosure.