| Technological developments, globalization, and the introduction of internet and new business over the last decade raise the importance of non-financial information in firm valuation. These trends reduce the informativeness of traditional financial information in favour of non-financial information. This dissertation therefore examines the relevance of non-financial information on the capital market. In a first study, we examine the association between the quality of non-financial information disclosed on corporate websites and a firm's implied cost of capital. Our results indicate that firms from continental Europe and North America decrease their finance cost as they improve the disclosure quality of non-financial information.; The second study researches non-financial information disclosures in Belgium. Research findings show an increase in the amount of non-financial information disclosed in annual reports over the period 2001-2005. We in particular find that large firms, more leveraged firms and firms with more intangible assets disclose more. Our results further show that analysts' forecast dispersion reduces when firms make more efforts to report non-financial information.; In a third study, we examine the behaviour of sell-side financial analysts towards non-financial information. These stakeholders are considered as one of the most important users of corporate information. They analyse and interpret corporate information in order to make stock recommendations. Our findings---based on a content analysis of analyst reports and a survey conducted among these analysts---reveal that they in particular place attention to non-financial forward-looking information, background information about the firm and information about innovation, research and development. Research results also show that the amount of information mentioned in analyst reports does not change over the period 2002-2006. Financial analysts also differ from each other in the amount of information they employ. Those financial analysts following firms characterised with more uncertainty use more non-financial information. Uncertainty reduces informativeness of financial statement information, which increases the importance of non-financial information. Findings also suggest that less experienced financial analysts rely more on non-financial information. Finally, financial analysts who use more forward-looking information and more information about innovation, research and development (internal capital information) produce more accurate earnings forecasts. |
