Environmental and Social Policy and Earning Persistence

• Published in: Business strategy and the environment Vol. 22; no. 3; pp. 159 - 172
• Main Authors: Mahjoub, Lassaad Ben, Khamoussi, Halioui
• Format: Journal Article
• Language: English
• Published: Chichester Blackwell Publishing Ltd 01.03.2013; Wiley; Wiley Periodicals Inc
• Subjects: 2005-2010; annual report; annual report, French companies; Annual reports; Bibliometrie; Business; Content analysis; Disclosure; earning persistence; Earnings; Environmental accounting; environmental and social disclosure; Environmental impact statements; Environmental policy; Europe; France; Frankreich; French companies; Jahresabschluss; Markets; Nachhaltigkeitsbericht; Profits; Raw materials; Regression; Regression analysis; Social information; Social policy; Strategy; Studies; Sustainability reporting; Time series; France
• ISSN: 0964-4733; 1099-0836
• DOI: 10.1002/bse.1739

ABSTRACT In recent years, the effect of disclosure on environmental and social information has been the subject of much research in an Anglo‐Saxon context. The European field, and especially the French companies, have not been sufficiently discussed. In this paper, we investigate the relationship between social and environmental disclosure and earning persistence (as a proxy of earning quality). We use the content analysis method with annual reports as a measure of social and environmental disclosure; the empirical validation is applied to the companies listed in the SBF 250 French stock market index over the 2005–2010 period. To measure earning persistence we opt for a regression of a time‐series model on panel data. The findings show that French companies are characterized by a high level of social and environmental reporting; this situation may affect positively the quality of earnings such as more persistent earnings. This means that companies with a higher level of social and environmental commitment are more likely to take benefits and to communicate more persistent earnings and be desirable to investors. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.