Investors’ Reactions to CSR News in Family Versus Nonfamily Firms: A Study on Signal (In)credibility

Naciye Sekerci, Jamil Jaballah, Nadine Kammerlander and Marc van Essen ()
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Naciye Sekerci: KU Leuven - Catholic University of Leuven = Katholieke Universiteit Leuven
Jamil Jaballah: EESC-GEM - Grenoble Ecole de Management
Nadine Kammerlander: WHU – Otto Beisheim School of Management (Germany, Vallendar) - WHU
Marc van Essen: University of South Carolina [Columbia]

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Abstract: We study family firm status as an important condition in signaling theory; specifically, we propose that the market reacts more positively to positive, and more negatively to negative, CSR news (i.e., signals) from family firms than to similar news from nonfamily firms. Moreover, we propose that during recessions, the direction of these relationships reverses. Based on an event study of 1247 positive and negative changes in the CSR ratings for all firms listed on the French SFB120 stock market index (2003-2013), we find support for our hypotheses. Moreover, a post hoc analysis reveals that the relationships are contingent on whether a family CEO leads the firm.

Keywords: family firms; signaling theory; corporate social responsibility; market reaction; recession; family CEO (search for similar items in EconPapers)
Date: 2022-01-01
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Published in Entrepreneurship Theory and Practice, 2022, 46 (1), pp.82 - 116. ⟨10.1177/10422587211010498⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:gemptp:hal-05656770

DOI: 10.1177/10422587211010498

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