Do Announcements About Corporate Social Responsibility Create or Destroy Shareholder Wealth? Evidence from the UK
David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
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Journal of Business Ethics 106 (3):253-266 (2012)
This paper investigates the stock market reaction to the announcement that a firm has been included in the UK FTSE4Good index of socially responsible firms. We use the announcement of firm inclusion in the index to estimate the stock market reaction to a firm being classified as socially responsible. This is an important test of whether investors view the undertaking of socially responsible activities by firms as a value increasing or value decreasing initiative by management. We do not find strong evidence in favour of a positive market reaction. However, there is a large cross-sectional variation in the market reaction to this announcement. Investors appear to be reacting to this event and there are a number of firm characteristics that are well-established proxies for CSR that can explain the market reaction
|Keywords||CSR Stakeholders Investors Firm value|
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References found in this work BETA
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Citations of this work BETA
Andreas G. F. Hoepner, Thereza Raquel Sales Aguiar & Ravi Majithia (2014). The Level of Compliance with the International Code of Marketing of Breast-Milk Substitutes: Does It Matter to Stock Markets? Journal of Business Ethics 119 (3):329-348.
Mahfuja Malik (forthcoming). Value-Enhancing Capabilities of CSR: A Brief Review of Contemporary Literature. Journal of Business Ethics.
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