Why Sin Stocks Have Abnormal Returns? An Experimental Investigation on the Effect of Corporate Social Responsibility on Investor's Investment Behaviour and Firm's Choice of Production Methods

2016 ◽  
Author(s):  
King King Li
Keyword(s):  
Experimental Investigation ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Abnormal Returns ◽  
Production Methods ◽  
Corporate Social ◽  
Investment Behaviour ◽  
Sin Stocks

scholarly journals Who Values Corporate Social Responsibility in the Korean Stock Market?

2019 ◽  
Vol 11 (21) ◽  
pp. 5924 ◽  
Author(s):  
Sangki Lee ◽  
Insu Kim ◽  
Chung-hun Hong
Keyword(s):  
Corporate Social Responsibility ◽  
Stock Market ◽  
Social Responsibility ◽  
Private Sector ◽  
Abnormal Returns ◽  
Pension Funds ◽  
Public Pension ◽  
Korean Stock Market ◽  
The Government ◽  
Corporate Social

In this study, we explore the stock market’s response to new information that a firm has been included in the Dow Jones Sustainability Index (DJSI) in Korea. In addition, we investigate which investor group contributes to the changes, if any significant increase in returns is found, after a firm’s incorporation into the DJSI. This study aims to identify which investors value corporate social responsibility (CSR) in the Korean stock market and examine whether the government-led campaigns for CSR have affected private sector investors, as well as those from the public sector. We find statistically significant abnormal returns for firms after their first listing in the index, implying that investors in Korean markets consider a firm’s inclusion in the DJSI as good news for the firm value. Using a unique dataset from the Korea Exchange (KRX) on investors, we classify investors into four groups: individual investors, public pension funds, other institutional investors, and foreign investors. Unlike prior studies that focus only on the existence of abnormal returns, we investigate the trading behavior of each investor group for such announcements. We find that it is mainly the buying pressure of public pension funds that generates abnormal returns. By contrast, we cannot find statistically significant results for the other investor groups. This result implies that the government-led campaign for CSR has only had limited effects in the Korean stock market, and that awareness of CSR in the private sector should be improved.

Who can realize the “spot value” of corporate social responsibility?

2020 ◽  
Vol 11 (4) ◽  
pp. 717-743
Author(s):  
Shiyu Wang ◽  
Yan Zhang ◽  
Guanzhen Wang ◽  
Zhibin Chen
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Voluntary Disclosure ◽  
Abnormal Returns ◽  
Chinese Stock Market ◽  
Chinese Market ◽  
Content Type ◽  
Retail Investors ◽  
Csr Disclosure ◽  
Corporate Social

Purpose This paper answers, in the Chinese stock market, who can realize the “spot value” of corporate social responsibility (CSR). Design/methodology/approach The authors use event-study to build the research framework. Using CSR report content analysis, the authors measure the specification level of CSR disclosure. Applying the Baidu index, the authors mine Chinese investors’ profiles data to investigate retail investor heterogeneity closely. Findings The authors find strong evidence that the measure captures a behavioral bias in CSR pricing: firms that choose to disclose CSR report experience positive abnormal return more among retail investors than institutional investors, more among young investors than older, but no difference between female and male investors. Practical implications For Chinese public firms, the authors give them evidence that they can realize positive abnormal returns by applying certain CSR disclosure strategies. For Chinese investors, especially retail investors and youths, the authors ask them to rethink whether their positive evaluation of CSR is a rational trade-off choice or whether they are fooled by the “hedging mask” and “attention-grabbing.” Social implications The findings can give some suggestions to regulators: encouraging voluntary disclosure and reducing mandatory disclosure can drive enterprises to engage in more CSR activities because the voluntarily CSR disclosure can realize both long-term value and “spot value.” Complementarily, a more rigorous CSR report auditing regulation can suppress the “greenwash” by increasing the “lying cost.” Originality/value Using behavioral finance theory, the authors connect the gap between neoclassical research on the “U-shaped” value realization of CSR and the increasing voluntary CSR disclosure in the Chinese market. The authors find that heuristic reason and emotionality orientation results in the Chinese “CSR-friendly” market.

Does Warsaw Stock Exchange value corporate social responsibility?

2016 ◽  
Vol 12 (3) ◽  
pp. 611-622 ◽  
Author(s):  
Jacek Lipiec
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Future Research ◽  
Public Companies ◽  
Content Type ◽  
Exchange Value ◽  
Warsaw Stock Exchange ◽  
Corporate Social

Purpose This paper aims to examine the performance of corporate social responsibility (CSR) portfolio at the Warsaw Stock Exchange. Design/methodology/approach This paper uses the CSR portfolio of public companies that was selected in a three-step procedure. In total, 23 companies were selected and formed a CSR portfolio that is traded on the Warsaw Stock Exchange under the Respect Index. The Capital Asset Pricing Model (CAPM) is used to compare returns of CSR companies with respect to the market. The performance of this portfolio is measured in the period from 2010 to 2012. Findings This paper finds that the CSR portfolio measured under the Respect Index outperformed market in all time periods from 2010 to 2012. In addition, in 2010, the CSR portfolio exceptionally outperformed the market by almost 80 per cent. In 2011, even though the market was down, the CSR portfolio reported lesser losses: −0.93 vs −1.73 per cent. In the following year, the market regained and the CSR portfolio again outperformed the market by 14 per cent. This paper also finds that the CSR portfolio is more sensitive to systematic risk than to specific risk. In addition, the CSR securities move according to the market trend. Research limitations/implications The limitation of this paper is attributed to a cause-and-effect relationship. In other words, it did not answer whether adopting CSR led to higher profitability or profitability reflected an awareness of market conditions that favored the adoption of CSR. The future research should focus on this issue and indicate whether investors prioritize CSR over profits or vice versa. Practical implications The results indicate that investments in CSR portfolio companies bring abnormal returns to investors. In addition, the CSR portfolio may resist market downturns and even bring exceptional profits to investors. Originality/value This study explains the CSR portfolio’s performance on the Warsaw Stock Exchange by using the CAPM.

scholarly journals ANALYSIS OF THE INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITY ON CORPORATE PERFORMANCE (Empirical Study on Manufacture Companies Listed on Stock Exchanges in Indonesia Periode 2010 - 2012 )

2014 ◽  
Vol 1 (1) ◽  
pp. 78
Author(s):  
Wiyan Patria ◽  
Rossje V Suryaputri
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Corporate Performance ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Stock Exchanges ◽  
Return On Equity ◽  
Unexpected Earnings ◽  
Corporate Social

<span class="fontstyle0">The purpose of this study is to determine the influence of corporate social responsibility on corporate performance. Samples were taken as much as 252 which consists of 84 companies listed on the Indonesia Stock Exchange in 2010- 2012. The variables used in this study are (ROE (return on equity), CSR (corporate social responsibility), CAR (Cumulative abnormal returns. DER (debt to equity ratio), SG (Sales growth), Beta, EU (Unexpected earnings ) as control variables.The results Showed that CSR does not have a significant influence on Return On Equity (ROE) as a measurement of financial performance and the company's cumulative abnormal return (CAR) as a performance measurement of the company's market. In the future studies are advised to conduct research with other variables in addition to Corporate Social Responsibility (CSR) which may affect the company's financial performance and corporate markets</span><span class="fontstyle2">.</span>

scholarly journals Effect of Corporate Social Responsibility Disclosures and Financial Information Against Abnormal Return (Empirical studies on food and beverage sub-sector manufacturing Companies listed on the Indonesia Stock Exchange for the period 2013 - 2017)

2019 ◽  
Vol 34 (1) ◽  
Author(s):  
Suroto Suroto ◽  
Ch. Asta Nugraha
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Abnormal Return ◽  
Abnormal Returns ◽  
Financial Information ◽  
Manufacturing Companies ◽  
Return On Assets ◽  
Insignificant Effect ◽  
Food And Beverage ◽  
Corporate Social

<p>This study aims to find empirical evidence of the effect of disclosure of corporate social responsibility and financial information proxied by accounting profits and return on assets to abnormal returns in food and beverage sub-sector manufacturing companies. The population in this study are all companies whose shares are consistently incorporated in the food and beverage sub-sector during the study period. The data used is secondary data in the form of annual reports. The statistical test used to test the hypothesis is panel data regression with a random effect model.</p><p>The results of this study indicate that disclosure of corporate social responsibility has a negative and insignificant effect on abnormal returns, accounting earnings have a negative and insignificant effect on abnormal returns and return on assets have a positive and significant effect on abnormal returns.</p><p>Keywords: corporate social responsibility, accounting profit, return on assets and abnormal return.</p>

scholarly journals Does social responsibility enhance firm value and return in Brazil?

2013 ◽  
Vol 10 (2) ◽  
pp. 253-257 ◽  
Author(s):  
Andre Carvalhal ◽  
Eduardo Tavares
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Firm Value ◽  
Stock Exchange ◽  
Corporate Sustainability ◽  
Abnormal Returns ◽  
Event Studies ◽  
Sustainability Index ◽  
Panel Regressions ◽  
Corporate Social

This paper analyzes whether corporate social responsibility brings value and enhances returns to shareholders in the Brazilian market. We analyze the companies listed on BM&FBovespa stock exchange using two methodologies (panel regressions and event studies). The results indicate that firms listed in the corporate sustainability index (ISE) of BM&FBovespa have higher price-to-book when compared to companies not listed on ISE. The event study shows that companies that leave ISE show negative abnormal returns. Moreover, firms entering ISE show positive abnormal returns, although results are not statistically significant

scholarly journals How do consumers search for and process corporate social responsibility information on food companies’ websites?

2019 ◽  
Vol 22 (2) ◽  
pp. 229-246 ◽  
Author(s):  
Denise Gider ◽  
Ulrich Hamm
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Information Search ◽  
Specific Information ◽  
Production Methods ◽  
Csr Communication ◽  
Corporate Websites ◽  
Global Action ◽  
Development Goals ◽  
Corporate Social

The importance of corporate social responsibility (CSR) communication for food companies has grown substantially ever since global action plans such as the UN Sustainable Development Goals have begun targeting topics which are highly relevant to food companies. Furthermore, various food scandals have caused consumers to question current food production methods, leading to a search for more information on ethical production methods. However, it is not known how consumers search for and process information on websites as one relevant CSR communication channel. The objective of this study is to develop requirements for consumer-aligned CSR communication on corporate websites. Information search and processing was examined through consumers’ navigation behavior on websites and by conducting think-aloud protocols. The findings of this study suggest companies provide comprehensive information that can easily be filtered. Furthermore, companies should present specific information to credibly distance themselves from greenwashing accusations, e.g. by referring to external evidence.

scholarly journals PENGARUH PENGUNGKAPAN CORPORATE SOCIAL RESPONSIBILITY PADA ABNORMAL RETURN

2019 ◽  
pp. 997
Author(s):  
Made Erika Krisdiyanti Putri ◽  
I Gusti Ayu Nyoman Budiasih
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Sampling Technique ◽  
Global Reporting Initiative ◽  
Manufacturing Companies ◽  
Csr Disclosure ◽  
Corporate Social ◽  
Adjusted Model

The population in this study were all manufacturing companies listed on the Stock Exchange from 2013 - 2017. The sampling technique was carried out using a purposive sampling method that is non-random selection of information obtained using certain considerations. The research sample consisted of 60 manufacturing companies listed on the Indonesia Stock Exchange (IDX) which were sampled during the 2013-2017 period. The measurement of CSR disclosure is based on the Global Reporting Initiative (GRI) -G4 of 91 CSR disclosure index items. Whereas, abnormal returns are calculated using the market adjusted model. The results show that disclosure of CSR affects abnormal returns. Research shows that investors consider CSR information to make decisions. The implication of this research is that investors care about corporate social responsibility in making decisions to invest.

scholarly journals Memaknai Ulang Corporate Social Responsibility: Upaya Mewujudkan Fair Responsibility

2016 ◽  
Vol 19 (3) ◽  
pp. 200
Author(s):  
Tauchid Komara Yuda
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Business World ◽  
Production Methods ◽  
Corporate Social ◽  
Limited Scope

CSR is essentially interpreted as a manifestation of the responsibility of the business world over the externalities arising from their production activities. But unfortunately this responsibility is only limited scope primary operationalization region without regard for the fact that externalities it has started from the first phase of extraction up to a radius of these products are marketed. Therefore, this paper seeks to encourage the existence of fair responsibility by understanding a CSR as companies att empt to produce eco-friendly products. With the company’s commitment to implement eco-friendly production methods, then indirectly the company has been reducing their externalities, its same doing CSR.

scholarly journals A Study of the Relationship between Corporate Social Responsibility Report and the Stock Market

2020 ◽  
Vol 12 (21) ◽  
pp. 9200
Author(s):  
An-An Chiu ◽  
Ling-Na Chen ◽  
Jiun-Chen Hu
Keyword(s):  
Corporate Social Responsibility ◽  
Stock Market ◽  
Social Responsibility ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Csr Reporting ◽  
Corporate Social Responsibility Report ◽  
Corporate Social ◽  
The Relationship

This study mainly investigates the relationship between corporate social responsibility (CSR) reporting and the reaction in the stock market. Specifically, we utilize the data from Taiwanese stock market from 2012 to 2017 to examine whether the CSR report disclosed by the listed companies on the Taiwan Stock Exchange and the Taipei Exchange will cause abnormal returns on the short-, mid- or long-term horizon. The empirical results demonstrate that companies which disclose their CSR reports generate higher and more positive mid- to long-term abnormal returns than undisclosed companies. In addition to filling the gap of previous studies, this study also examines whether CSR reports mitigate the information asymmetry between management and stakeholders. Companies disclosing their CSR reports will boost the confidence of investors and lead to higher stock return valuations.

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