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The impact of company size on the value relevance of social ratings: A quantitative study
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.
2015 (English)Independent thesis Advanced level (professional degree), 20 credits / 30 HE creditsStudent thesis
Abstract [en]


Problem background and problem discussion: The increased demands on companies

and their ability to operate sustainably has made corporate social responsibility (CSR) a

very hot topic in modern society. The academic debate has yet to put a definite answer

on whether the engagement in CSR activities has a positive effect on a company

financially. Previous research on stock listed in Sweden indicate that there is a positive

relationship between environmental performance and that there is an asymmetry in how

it is valued across company sizes. However, there has not yet been any research made

into what impact size has on the value relevance of social CSR ratings. This will be

tested by drawing from resource-based theory and legitimacy theory.

Research question: How is the value relevance of social ratings affected by accounting

for company size?

Purpose: The purpose is to examine what effect the inclusion of corporation size has on

the value relevance of social CSR ratings.

Theory: The study primarily utilizes Stakeholder theory, the resource-based theory and

legitimacy theory.

Method: This is a quantitative study in a panel data setting with a deductive research

approach. The practical method is a regression analysis that assesses the value relevance

of CSR measures at the OMX Stockholm for the years of 2006, 2007, 2008, 2009, 2011

and 2013. The study encompasses 349 Small-, medium- and large-sized companies and

has a total of 1429 observations, which have been subject to statistical significance


Results and analysis: The results show that social, environmental and overall CSR

ratings are value relevant and associated with lower market values. There also seems to

be little impact on results by including company size as a variable. Furthermore the

results of this study differ from previous research, implying that results are very

sensitive to changes in the regression model.

Conclusion: The results of the study lead us to believe that size has little impact on how

value relevant social ratings are. This implies that regardless theory such as the

resource-based and legitimacy theory these cannot be supported in practice among

Swedish firms listed at OMX Stockholm. Furthermore, our method gives different

results with regard to previous research done on the Swedish market and indicates that

there is a negative relationship between CSR ratings and market value.

Place, publisher, year, edition, pages
2015. , 70 p.
Keyword [en]
social ratings, value relevance, csr, stakeholder theory
National Category
Business Administration
URN: urn:nbn:se:umu:diva-106093OAI: diva2:840212
Educational program
International Business Program
Available from: 2015-07-08 Created: 2015-07-07 Last updated: 2015-07-08Bibliographically approved

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