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Corporate Goodness and Shareholder Wealth

Published in Journal of Financial Economics. 2015, vol. 115, no. issue 2, p. 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 Social and environmental responsibilityShareholder valueEvent studyCorporate governanceCorporate cultureAgency costsCorporate sustainability
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KRUEGER, Philipp. Corporate Goodness and Shareholder Wealth. In: The Journal of Finance Economics, 2015, vol. 115, n° issue 2, p. 304.329. https://archive-ouverte.unige.ch/unige:85431

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Deposited on : 2016-07-25

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