Social capital, CSR, and stock markets around the world

Soonho Kim () and Haejung Na ()
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Soonho Kim: Pukyong National University Business School
Haejung Na: California State University Los Angeles

Economics Bulletin, 2024, vol. 44, issue 4, 1434 - 1456

Abstract: This study examines the interaction between social capital and economic progress, both internal and external, in influencing stock market quality on an international scale. We proxy internal economic progress with corporate social responsibility (CSR) and external progress with globalization, utilizing an aggregate CSR score from the World Bank's Sovereign ESG Data Portal and the KOF Globalization Index, respectively. Our results suggest a synergetic effect between social capital and CSR on stock market quality. In specific, we find that social capital and corporate governance jointly improve stock market efficiency. Additionally, our evidence suggests that a more pronounced joint effect between social capital and corporate governance may exist in civil law countries compared to common law countries. Finally, while internal economic progress is found to interact with social capital, there is no evidence to support an interplay between social capital and external progress, or globalization, in the stock market.

Keywords: social capital; corporate social responsibility; stock market efficiency (search for similar items in EconPapers)
JEL-codes: F3 G3 (search for similar items in EconPapers)
Date: 2024-12-30
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