Corporate goodness and shareholder wealth

Philipp Krüger
Authors registered in the RePEc Author Service: Philipp Krueger

Journal of Financial Economics, 2015, vol. 115, issue 2, 304-329

Abstract: Using a unique data set, I study how stock markets react to positive and negative events concerned with a firm׳s corporate social responsibility (CSR). I show that investors respond strongly negatively to negative events and weakly negatively to positive events. I then show that investors do value “offsetting CSR,” that is positive CSR news concerning firms with a history of poor stakeholder relations. In contrast, investors respond negatively to positive CSR news which is more likely to result from agency problems. Finally, I provide evidence that CSR news with stronger legal and economic information content generates a more pronounced investor reaction.

Keywords: Corporate social responsibility; Corporate sustainability; Agency costs; Event study; Corporate governance (search for similar items in EconPapers)
JEL-codes: D21 G14 L21 M14 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (118)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:115:y:2015:i:2:p:304-329

DOI: 10.1016/j.jfineco.2014.09.008

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