The Value Relevance of Social Report

We test whether the publication of a social report influences stock price directly and/or indirectly. We use the value relevance model and a sample of 178 Italian companies that were listed on Milan Stock Exchange from 2002-2008. The estimates demonstrate a significant negative correlation between publication of a social report and stock price. Furthermore, all other factors being equal, book value per share accounting information is more relevant for companies that publish a social report, whereas the relevance of earnings per share does not change for these companies in relation to stock price.