Distinct Mechanisms of Investors' Reactions to First‐Time Versus Continuous <scp>CSR</scp> Disclosures

ABSTRACT Integrating signalling and affect‐as‐information theories, this study examines dynamic market reactions to CSR disclosures using data from Chinese A‐share listed companies from 2007 to 2019. We find that first‐time disclosures elicit positive reactions via rational signalling, whereas continuous disclosures rely on affective identification. The distinct mechanisms are further demonstrated by the same amplifying effects of report detail and the only significant reaction when optimistic earnings forecasts are not realised. Our results highlight a temporal shift from signalling perception to emotional reliance, enriching the dynamic understanding of the investors' reaction to corporate CSR reporting.