When it pays to be a friend: Investigating nonprofessional investors' judgments toward CSR companies following an accounting restatement

Prior literature suggests that engagement in corporate social responsibility (CSR) creates an insurance effect that shields companies from the negative consequences of corporate missteps. We experimentally examine whether this protection extends to an accounting restatement and whether investors' attributions of the underlying reasons for this restatement affect their judgments. Results indicate that when a restatement occurs, non-professional investors evaluate high-performing CSR companies more favorably than their average-performing peers, but only when the misstatement appears unintentional. We also incorporate the Stereotype Content Model to test whether feelings of warmth and competence toward the company affect non-professional investor judgments. We document that absent a restatement, feelings of warmth mediate the relationship between CSR performance and investor judgments through competence. Following a misstatement, however, warmth directly mediates that relationship. Our results provide insights into specific psychological mechanisms and boundary conditions of the previously documented insurance effect of CSR performance.     

State-owned capital and corporate social responsibility of private-holding companies: evidence from China

The undertaking of corporate social responsibility (CSR) has become a topic of widespread concern in society. Utilising a sample of 9872 private-holding companies listed on the Shanghai and Shenzhen securities markets from 2009 to 2019, this study examines the impact of state-owned capital on CSR activities. We find that CSR is enhanced when the proportion of state-owned capital in a private-holding listed company exceeds 5 percent. The appointment of directors, supervisors, and senior management by state-owned shareholders, and the participation of state-owned investment in company operation further promote the fulfilment of CSR in private-holding listed companies. This research not only enriches the literature on the economic consequences of state-owned equity holdings in private companies, but also provides empirical evidence regarding the outcomes of improvement of corporate governance mechanisms.     

Risk management of Chinese food companies; a management perspective

This study investigated the current situation of food risk management (FRM) in Chinese companies and the factors that influence the effectiveness of risk management measures. FRM is considered from the perspective of food company managers in 161 food companies surveyed in the Provinces of Henan and Hubei, Central China. Results suggest that the current FRM situation in China is poor, and the most important factor influencing the effectiveness of FRM measures is the financial resource allocated to FRM. Other affecting factors include the level of corporate social responsibility (CSR) engagement of the company and the company size (measured by the number of employees). The better the CSR, the better the FRM; the larger the company, the less effective the FRM measures are. The study provides some suggestions for policy-making and further research.     

Implications for brokerage firms’ financial disclosures: From CSR perspectives

Given the importance of transparency in today's financial environment, it is surprising that limited research has examined investors’ attitudes toward brokerage firms’ financial disclosures and how their attitudes toward brokerage firms’ financial disclosures influence subsequent responses such as perceived trust and attitude toward brokerage firms. Research on Corporate Social Responsibility (CSR) practices and the Social Contract Theory suggests that investors may put a relatively high value on brokerage firms that practice financial disclosures responsibly. This research probed the relevance of this assumption by testing the relations among investors’ attitudes toward brokerage firms’ financial disclosures, attitudes toward CSR practices, perceived trust toward brokerage firms, attitudes toward brokerage firms and behavioral intentions toward brokerage firms with a survey study. The study used brokerage firms’ financial disclosures in general as the focus of this study's survey questions and a convenience sample consisting of investors. The results suggested that investors’ positive attitudes toward brokerage firms’ financial disclosures positively enhanced their attitudes toward brokerage firms’ CSR practices and perceived trust toward brokerage firms, whereas investors’ attitudes toward brokerage firms’ CSR practices mediated their attitudes toward financial disclosures to enhancing their perceived trust toward brokerage firms. Moreover, investors’ attitudes toward brokerage firms mediated their perceived trust toward brokerage firms on enhancing their behavioral intentions toward brokerage firms.     

Personality variables as predictors of budget system characteristics

Personality measures, perceptions of organizational climate, and attitudes toward the budgetary system were gathered from 97 operating executives with heavy budgetary responsibilities in 18 companies, along with data concerning the degree of rigidity or degree of participation in the budgetary system of each company. The personality traits of authoritarianism, need for independence, and flexibility were found to be correlated with the individual's perception of organizational climate and with certain attitudes toward the budgetary system. A discriminant analysis of these personality variables indicates that they have predictive ability concerning the rigidity or participativeness of the budgetary system but have no predictive ability concerning the individual's attitude toward the system.     

Strange bedfellows? Voluntary corporate social responsibility disclosure and politics

We show a reliable association between voluntary corporate social responsibility (CSR) disclosure and company political interests, which we proxy by company employees’ contributions to political action committees and statewide voting in presidential elections. This relation is most pronounced for the contributions of Democratic employees at companies in states that vote for the Democratic presidential candidate. We also show a positive association between corporate political contributions and excess stock returns. A portfolio strategy of investing based on company size, CSR disclosure intensity and corporate political contributions produces a significant positive mean excess stock return of 4.5 per cent over 3 months following CSR disclosure.     

Standalone CSR reporting by U.S. retail companies

We investigate first-time use of standalone CSR reporting in the U.S. retail industry. We find it is limited to publicly traded companies and that environmental rather than other social disclosures are most prominent. We document that firms focus on discussing CSR initiatives and programs as opposed to providing performance data, suggesting the reports are more about image enhancement than transparent accountability. We explore impacts of the choice to disclose, and our findings suggest that standalone CSR reporting by the retail companies appears to positively influence perceptions of company reputation, and may be leading to increased appeal to socially responsible investors.     

The Corporate Social Responsibility (CSR) Trend

Corporate Social Responsibility, or “CSR,” has recently become a subject of study by financial economists. While there is no shortage of anecdotal evidence to support all variety of positions, broad‐based statistical evidence about the CSR movement is in short supply. This article presents some new empirical evidence that aims to answer three related questions about CSR: First, are corporations increasing their “investment” in what is considered socially responsible behavior? Second, does corporate investment in social responsibility affect a company's financial performance and shareholder value? Third, why do companies invest in CSR: to increase shareholder value, or to uphold a “moral” commitment to non‐investor stakeholders and “society”? Using a social responsibility metric that measures the net CSR strengths (i.e., strengths less concerns) of each S&P 500 and Domini 400 company, the authors report that the average net CSR for both indexes decreased during the 15‐year period (1991‐2005) of the study—though the Domini 400, as might be expected, experienced a smaller decline. The authors also report that corporate strengths have increased, on average, but at a slower rate than the “concerns,” which suggests that corporate CSR efforts may be aimed at a moving target with steadily rising expectations and requirements. Second, the authors report that companies with more CSR strengths or fewer CSR weaknesses produced higher ROA over the same 15‐year period. The authors' findings here suggest a “circular” causality in which profitable companies are more likely to invest in CSR initiatives to begin with, but then find their performance further improved by such investment. Third, the authors' findings suggest that most companies devote resources to CSR initiatives as a means of maximizing long‐run value rather than out of a prior commitment to stakeholders. More specifically, the study shows that companies appear to invest more heavily to build CSR strengths than to eliminate CSR concerns. And as the authors conclude, this behavior is consistent with a strategy of using CSR as a form of “risk management” that promotes corporate strengths in order to limit the potential negative effects of—perhaps by diverting attention from—their weaknesses.     

企业社会责任与债务违约风险——基于ISO26000社会责任指南的原则和实践的分析

基于 ISO26000社会责任指南的原则和实践经验,分析企业社会责任降低债务违约风险的内在机制及我国企业社会责任表现与其债务违约风险的关系。研究发现：社会责任表现较好的企业债务违约风险较低,因债务事项被提起仲裁和诉讼的可能性较小,企业积极承担社会责任可以促进债务契约的履行,降低债务违约风险。进一步分析发现,经营能力和信息质量在企业社会责任与债务违约风险的关系中发挥部分中介传导作用,而经营风险的中介效应不明显。     

消费者投诉冲击与保险公司业绩北大核心

保险消费者权益保护是保险监管的目标之一,也是保险市场健康发展与成熟的标志。本文以中国保险监管部门开通首个保险消费者投诉热线作为外生政策变量,利用2009-2018年中国163家保险公司数据设计准自然实验,研究了保险消费者投诉热线的外部监督职能及其对保险公司业绩的影响。研究结果表明:保险消费者投诉热线的开通显著降低了消费者权益保护水平更差的保险公司业绩;佣金激励水平越高,保险消费者投诉冲击对消费权益保护水平更差的保险公司业绩的负向影响越显著;区分人身保险公司与财产保险公司后发现,保险消费者投诉冲击对消费者权益保护水平更差的财产保险公司业绩的负向影响更显著。本文研究成果丰富了消费者权益与保险公司治理理论,对保险消费者权益保护实践和保险市场高质量发展具有启示意义。     

An analysis of simultaneous company defaults using a shot noise process

During the subprime mortgage crisis, it became apparent that practical models, such as the one-factor Gaussian copula, had underestimated company default correlations. Complex models that attempt to incorporate default dependency are difficult to implement in practice. In this study, we develop a model for a company asset process, based on which we calculate simultaneous default probabilities using an option-theoretic approach. In our model, a shot noise process serves as the key element for controlling correlations among companies’ assets. The risk factor driving the shot noise process is common to all companies in an industry but the shot noise parameters are assumed company-specific; therefore, every company responds differently to this common risk factor. Our model gives earlier warning of financial distress and predicts higher simultaneous default probabilities than commonly used geometric Brownian motion asset model. It is also computationally simple and can be extended to analyze any finite number of companies.     

The effect of corporate social responsibility on the branding of financial services

In today's global world, corporate social responsibility (CSR) is increasing public demand for greater transparency from multinational companies. CSR is a new and growing financial risk factor. If it is mismanaged, a firm's corporate reputation can be badly damaged and a direct negative impact on its business and bottom-line may result. Instead of simply campaigning directly against industrial groups and lobbying governments and international organisations to issue new legislation, non-governmental organisations (NGOs) are increasingly putting pressure on the financial services groups and insurance companies. This new global tactic may affect a bank's relationship with its clients and shareholders.There are market benefits and competitive advantages for those companies whose business policies integrate CSR. The growth in socially responsible investments and in CSR awareness among City people persuades some bankers that the most successful firms of the future will be those who proactively balance short-term financial goals with long-term sustainable franchise building. To respond to this challenge, corporations will have to convince citizens they can trust both their brands and the people behind them. In this context, one must recognise that finance brands have been clumsily managed. Nowadays, several big consumer brands are used as societal role models, but they are also the targets of anti-globalisation and anti-logo activists. In order to avoid such an outcome — not to mention corporate mortification — the key social marketing strategy must be to communicate proactively the business activity's raison d'être to opinion leaders and the general public. In general, industry does not yet care enough and many companies are reacting only when put under pressure by public opinion. It is time, however, to market the social raison d'être of a business and indeed to contest its current exclusion from ‘civil society’. Consumer and service sectors lead the field. In view of the downturn of the global economy, more than ever before, CSR branding is of paramount importance to the financial sector if bankers do not want to become the easy scapegoats. It is necessary to make it clear that financial services companies are global citizens too.     

Corporate social responsibility disclosure and the cost of equity capital: The roles of stakeholder orientation and financial transparency

We examine the benefits associated with corporate social responsibility (CSR) disclosure in an international setting covering 31 countries. Using variables such as the legal status of labor protection, CSR disclosure requirements, and public awareness of and attitudes toward CSR issues, we divide countries into more and less stakeholder-oriented groups. We find a negative association between CSR disclosure and the cost of equity capital; this relationship is more pronounced in stakeholder-oriented countries. We also find evidence that financial and CSR disclosures act as substitutes for each other in reducing the cost of equity capital. This study furthers our understanding of CSR disclosure and its consequences.     

Examining CSR disclosure strategies within the Australian food and beverage industry

This study examines intra-industry variation in CSR disclosure practice. Specifically, it investigates whether companies from industry sub-sectors with different CSR profiles have varying patterns of CSR disclosure. The industry analysed is the Australian food and beverage industry. The paper finds that companies from industry sub-sectors with higher CSR profiles engage in greater ‘symbolic’ disclosures. Further, the relationship between CSR profile and disclosure strategy was found to be influenced also by the centrality of the CSR issue under examination to the company's business. While the small sample size limits generalisability, these findings have implications for both CSR research and practice.     

Going green: Market reaction to CSRwire news releases

Voluntary disclosure theory predicts that an optimal disclosure decision should produce an overall net benefit for shareholders, and that such net benefit should decrease in public information availability. This study supports the predictions of voluntary disclosure theory in the context of climate change. Using voluntary disclosures made through the CSRwire news service, we find that managers’ disclosure decisions involving greenhouse gas emissions produce positive returns to shareholders. This response varies negatively with company size and public information availability. For small companies in a limited public information environment, we find that mean market-adjusted share price increases significantly by 2.32% over days −2 to 2 around the CSR newswire release date. Our sample of disclosing companies received an aggregate market value boost from their CSR news releases of approximately ten billion dollars, independent of differences in public information availability.     

Hadfields Ltd: its annual general meetings 1903–1939 and their relevance for contemporary corporate social reporting

Little attention has been given to studies of the historical antecedents of corporate social reporting (CSR). The paper looks at the disclosures made by Hadfields Ltd and other British companies at the beginning of the 20th century, and finds that these included topics such as economic, political and industrial relations conditions, in a style analogous to that employed in CSR reporting today, during periods of difficulty and conflict for the reporting companies. The paper concludes that these findings support the argument that CSR may be less a reflection of a new relationship between companies and society than another form of what Milne calls ‘advocacy advertising’.     

On the Foundations of Corporate Social Responsibility

Using corporate social responsibility (CSR) ratings for 23,000 companies from 114 countries, we find that a firm's CSR rating and its country's legal origin are strongly correlated. Legal origin is a stronger explanation than “doing good by doing well” factors or firm and country characteristics (ownership concentration, political institutions, and globalization): firms from common law countries have lower CSR than companies from civil law countries, with Scandinavian civil law firms having the highest CSR ratings. Evidence from quasi‐natural experiments such as scandals and natural disasters suggests that civil law firms are more responsive to CSR shocks than common law firms.     

Customer values and CSR image in the banking industry

The authors analyse the role that collectivism and novelty seeking play in the formation process of corporate social responsibility (CSR) image in the Spanish banking industry. Two multisampling analyses of a structural equation model are performed on a sample of 1124 customers. The findings of the article allow the authors to anticipate CSR image based on (i) the congruence between the company and its CSR initiatives, (ii) the attribution of motivations for the company to implement CSR and (iii) corporate credibility in developing CSR initiatives. The findings also show that collectivists and innovative customers process information differently to individualists and conservative customers.     

Corporate social responsibility and litigation risk: Evidence from securities class action lawsuits

This study examines whether corporate social responsibility (CSR) is associated with the likelihood and outcomes of securities class action lawsuits. We find a lower likelihood of securities litigation for firms with higher CSR. This effect is larger for companies with lower levels of financial distress, companies with larger proportions of institutional investors, and for internal CSR. Additionally, CSR has a mitigating effect on negative market assessments around the filing dates of securities litigation. The results suggest that higher CSR firms are less likely to engage in financial misconduct, and investors are less likely to penalise them for such occurrences.