 How do socially controversial companies do during a stressful time? Evidence from the Great RecessionPattanaporn Chatjuthamard, Patcharawalai Wongboonsin, Kritika Kongsompong and Pornsit Jiraporn The North American Journal of Economics and Finance, 2020, vol. 54, issue C Abstract: This study investigates the performance of socially controversial companies during a financial crisis. Companies are usually considered controversial if they are involved in controversial businesses such as alcohol, tobacco, firearms, nuclear etc. The results show that controversial firms exhibit higher firm value as well as better accounting performance during the Great Recession than otherwise similar, albeit non-controversial, firms. The results are consistent with the notion that the demand for controversial products remains relatively stable even during a stressful time. Further analysis confirms the results, including random-effects analysis, GMM dynamic panel data analysis, and instrumental-variable (IV) analysis. The results of this paper are particularly relevant to portfolio management, where controversial firms may be added to portfolios to inoculate them from a negative shock brought about by an economic crisis. Keywords: Sin stocks; Controversial stocks; Financial crisis; Great Recession (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:54:y:2020:i:c:s1062940818303838 DOI: 10.1016/j.najef.2018.12.010 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
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