Are Shareholders Willing To Pay For Financial, Social And Environmental Disclosure? A Choice-Based Experiment

de Villiers, C.; Cho, C.H.; Turner, M.J.; Scarpa, R.

Abstract

This study investigates whether shareholders are willing to pay for higher levels of corporate financial, social, and environmental disclosure. We conduct a choice-based conjoint experiment wherein 65 shareholders are asked to make 12 choices, choosing each time between two predetermined randomized combinations of different levels of investment returns, financial disclosure, environmental disclosure, and social disclosure. Results indicate that whereas shareholders are willing to pay for financial disclosure and environmental disclosure, they are unwilling to pay for social disclosure. Hence, the latter finding does not provide conclusive evidence on the overall question. However, the result that investors are willing to pay for non-financial disclosures—such as environmental information—constitutes our main contribution as prior research has not been able to provide strong evidence that investors are willing to forfeit investment returns in order to gain access to more corporate disclosures. The use of a choice-based conjoint experiment to examine these matters is novel and potentially opens avenues for future research. We believe our theoretical and practical contributions to be of interest to various stakeholders, including firms in making decisions about disclosure levels and regulators in assessing the need for financial disclosure regulation.

Citation

de Villiers, C., Cho, C., Turner, M., & Scarpa, R. (2023). Are Shareholders Willing To Pay For Financial, Social And Environmental Disclosure? A Choice-Based Experiment. European Accounting Review, 32(1), 1-28. https://doi.org/10.1080/09638180.2021.1944890

• Journal Article Type: Article
• Acceptance Date: Jun 7, 2021
• Online Publication Date: Jul 12, 2021
• Publication Date: 2023
• Deposit Date: Jun 8, 2021
• Publicly Available Date: Jan 12, 2023
• Journal: European Accounting Review
• Print ISSN: 0963-8180
• Electronic ISSN: 1468-4497
• Publisher: Taylor and Francis Group
• Peer Reviewed: Peer Reviewed
• Volume: 32
• Issue: 1
• Pages: 1-28
• DOI: https://doi.org/10.1080/09638180.2021.1944890
• Public URL: https://durham-repository.worktribe.com/output/1247220