Journal of Financial Economics Vol. 115 No. 2 2015
Corporate goodness and shareholder wealth
Abstract
Using a unique data set, I study how stock markets react to positive and negative events concerned with a firm׳s corporate social responsibility (CSR). I show that investors respond strongly negatively to negative events and weakly negatively to positive events. I then show that investors do value “offsetting CSR,” that is positive CSR news concerning firms with a history of poor stakeholder relations. In contrast, investors respond negatively to positive CSR news which is more likely to result from agency problems. Finally, I provide evidence that CSR news with stronger legal and economic information content generates a more pronounced investor reaction.
- DOI
- 10.1016/j.jfineco.2014.09.008
- Volume
- 115
- Issue
- 2
- Pages
- 304-329
- Language
- en
- Sources
- crossref bibtex:phds-export.bib openalex