Corporate risk disclosure and firm value: UK evidence

This study examines the influence of risk disclosure (RD) in the annual reports on Firm Value (FV) in the UK context. Furthermore, it addresses the moderating role of the analyst information environment in shaping this relation. Our study distinguishes between favourable and unfavourable information and examines whether the different nature of risk information could affect the FV differently. Our study contributes to the existing literature by providing empirical evidence on the value relevance of the narrative risk information. In particular, using a sample of UK listed firms, we find a positive relation between risk information and FV. We also contribute to the dilemma of risk disclosure measurement by using four different RD proxies. Our study has important implications for academics, standard setters, investors and managers.