Independent thesis Advanced level (professional degree), 20 credits / 30 HE credits
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
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.
2015. , 70 p.