The IPO corporate social responsibility information disclosure: Does the stock market care?

Fangliang Huang, Lijin Xiang, Rongbing Liu, Shuling Su and Hao Qiu

Accounting and Finance, 2019, vol. 59, issue S2, 2157-2198

Abstract: We create textual information indices using corporate social responsibility (CSR) information extracted from IPO prospectuses in China. We use the indices to measure the issuers’ corporate social performance (CSP) and corporate environmental performance (CEP) and assess how the stock market reacts. We find that CSP disclosure is significantly related to the post‐market performance of the firm. Specifically, better CSP disclosure is correlated with higher post‐IPO listing holding period returns among firms that do not disclose donations or environmental expenditures, although the association does not hold for firms that make donations and environmental expenditures. In addition, institutional investors seem to care more about the CEP information for a firm than the CSP information.

Date: 2019
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