If Corporate Social Responsibility (CSR) activities are beyond a firm's legal obligations and potentially require a sacrifice in short-term profits, why do firms promote CSR? This question motivates this investigation of the impact of CSR on a firm's Corporate Financial Performance (CFP). This relationship is examined for the period from 2004 to 2013 in South Africa. We assess the short-term impact of CSR announcements on financial returns of firms included in or excluded from the Johannesburg Securities Exchange Socially Responsible Investment Index and determine whether there is a difference in the long-term CFP between these two groups for the entire period. The event study methodology shows that investors were rewarded in 2004 and 2012, when firms entered the index, and were penalized in 2013, when firms exited the index. When using regression analysis, the various industries provide mixed results between CSR and CFP for firms over the long term. Based on these results, we find that CSR activities lead to no significant differences in financial performance.sacrifice of short-term profits compensated by improvement in firms' long-term financial per-

Herding behaviour can be captured by the relationship between share price movements with the market, typified by beta. We examine herding behaviour for the period 1995 to 2011 and find that it is absent overall, yet present during bear market periods only. When examined alongside the market cycle, herding appears to dramatically fluctuate before a market contraction. Conceptually, herding can be seen as an explanatory factor for the existence of a nonlinear market model. Our findings infer that a negative market reaction (contraction) is preceded by an increase in herding. The evidence of herding in during a South African market contraction can thus impact financial forecasts and volatility estimates of the market. Further, it could possibly indicate the level of confidence of market participants -both experienced and inexperienced individuals tend to follow the group consensus in times of a market downturn, yet deviate from the group consensus in times of a market upturn.

No abstract

No abstract

This study examines the role of economic policy uncertainty (EPU) in influencing firm performance and leverage as a form of financing decisions, in the presence of herding in the emerging markets of Brazil, Russia, India, China and South Africa (BRICS). This study contributes to our understanding of how businesses in emerging markets make financial decisions during uncertain times as well as the role of policy development in influencing firm performance and corporate decisions. The increase or decrease in EPU is determined by the way policymakers or investors act and the consequences of their decisions. EPU is, in fact, a market characteristic that brings changes in prices and returns. Therefore, investors and policymakers should be aware of it to prevent any negative effects. A steady and predictable economic policy is critical to economic growth. We investigate how firms rationalise making leverage financing decisions during times of economic policy uncertainty and if so, if herding is present in these decisions. Our data spans the Top 80 listed firms in each respective country from the beginning of June 2002 to the end of June 2017. Russian, Indian and South African results show that EPU is significant in determining leverage financing decisions and that an increase in EPU leads to herding in such decisions. We find contrary results in Brazilian and Chinese firms. Our results imply that when leverage decisions are made, both the political climate as well as competitor movement data must be considered in determining a firm's "ideal" capital structure. ABOUT THE AUTHORSPrudence Makololo is an Investment Professional and a PhD candidate from the University of Witwatersrand. She obtained her MCom in Finance from the University of the Witwatersrand and her area of interest is behavioural finance and emerging markets. Yudhvir Seetharam is the Head of Analytics, Insights and Research at a major South African bank; and a Senior Lecturer in Finance from the University of the Witwatersrand. His area of research is in quantitative behavioural finance. Yudhvir is an editor for Cogent Economics and Finance.