Impact Rating of Social Responsibility on Investors’ Estimates of Company Fundamental Value

Subject Areas : مدیریت

Habib Olah ْGarousi ¹ , Naser Izadinia ² , Mohsen Dastgir ³

1 - Ph.D. Candidate, Department of Accounting, Esfehan Branch(Khorasgan), Islamic Azad University, Esfehan, Iran
2 - Associate Professor , Department of Accounting, Esfehan Branch, Esfehan University, Esfehan, Iran
3 - Professor, Department of Accounting, Ahvaz Branch, Shahid Chamran University, Ahvaz, Iran

Received: 2018-09-18 Accepted : 2018-09-18 Published : 2018-08-23

Keywords: Rate of Corporate Social Responsibility, Company Fundamental Value, Investor&rsquo, Estimate,

Abstract :

The goal of this research is to investigate the impact rate of social responsibility on investors’ estimates of company fundamental value. Given the lack of ranking of companies in terms of social responsibility in iran for determine the rate of social responsibility of companies admitted to Tehran Stock Exchange and OTC securities, a questionnaire consisting of 130 questions in nine main level that included:1-economic level, 2-social participation,3-corporate governance, 4- human rights and meritocracy,5- environmental and sustainable development,6-religious,7-products,8-ethics(organizational,professional,social),9-cultural was used.The data of this research is cross-sectional and the statistical population of the study is all the Tehran stock exchange and OTC securities whose financial statements are available in 2016. The test of hypotheses has been done in experimental study for investigating the effect of social responsibility rating on estimation of investors from fundamental value of company. The estimation of fundamental value of 319 Companies there have been by use of the penman residual profit model (2009).To test the hypotheses, a multivariate regression model, paired t-test and wald test were used. The findings show that investors with awareness of the social responsibility rating can be more accurate estimate of the fundamental values of their company. In other words, the estimation of investors without awareness of the social responsibility rating and using traditional financial statements is more (less) than the firm's actual value when the performance of social responsibility is negative (positive). Inconclusion, corporate social responsibility in decision-making has time Information and is part of relevant information on the decision-making by investors.