Corporate social responsibility disclosure, dividend payments and firm value - Relations and mediating effects

We examine the relations between corporate social responsibility (CSR) disclosures, dividend payments and firm value. We use an international sample and measure CSR disclosures based on Global Reporting Initiative (GRI) disclosure levels, which we divide into two parts (unexpected and expected disclosures). We find three main results. First, firms with higher levels of unexpected CSR disclosure pay higher dividends, and this association is attributable to firms where unexpected CSR disclosure is aligned with CSR performance. Second, only the unexpected part of CSR disclosures is positively associated with share prices. Third, this positive association is fully mediated by dividends.