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The Importance of Corporate Environmental Reputation to investors

Hussainey, K.; Salama, A.

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Authors

K. Hussainey

A. Salama



Abstract

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 et al. to examine the importance of CER for investors. It uses a sample of 889 non-financial firms listed on the London Stock Exchange from 1996 to 2004. 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.

Citation

Hussainey, K., & Salama, A. (2010). The Importance of Corporate Environmental Reputation to investors. Journal of Applied Accounting Research, 11(3), 229-241. https://doi.org/10.1108/09675421011088152

Journal Article Type Article
Publication Date Jan 1, 2010
Deposit Date Nov 22, 2010
Publicly Available Date Nov 28, 2019
Journal Journal of Applied Accounting Research
Print ISSN 0967-5426
Publisher Emerald
Peer Reviewed Peer Reviewed
Volume 11
Issue 3
Pages 229-241
DOI https://doi.org/10.1108/09675421011088152
Keywords Corporate social responsibility, Earnings, Investors, Stock returns, United Kingdom.
Public URL https://durham-repository.worktribe.com/output/1525765

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Copyright Statement
This article is © Emerald Group Publishing and permission has been granted for this version to appear here http://dro.dur.ac.uk/7595. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.




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