Do announcements about corporate social responsibility create or destroy shareholder wealth? Evidence from the UK

Clacher, Iain and Hagendorff, Jens ORCID: https://orcid.org/0000-0002-3567-7826 2012. Do announcements about corporate social responsibility create or destroy shareholder wealth? Evidence from the UK. Journal of Business Ethics 106 (3) , pp. 253-266. 10.1007/s10551-011-1004-9

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Abstract

This paper investigates the stock market reaction to the announcement that a firm has been included in the UK FTSE4Good index of socially responsible firms. We use the announcement of firm inclusion in the index to estimate the stock market reaction to a firm being classified as socially responsible. This is an important test of whether investors view the undertaking of socially responsible activities by firms as a value increasing or value decreasing initiative by management. We do not find strong evidence in favour of a positive market reaction. However, there is a large cross-sectional variation in the market reaction to this announcement. Investors appear to be reacting to this event and there are a number of firm characteristics that are well-established proxies for CSR that can explain the market reaction.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HF Commerce H Social Sciences > HG Finance
Publisher:	Springer Verlag
ISSN:	1573-0697
Date of First Compliant Deposit:	30 March 2016
Last Modified:	19 Nov 2024 16:15
URI:	https://orca.cardiff.ac.uk/id/eprint/76283

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