Corporate social responsibility and earnings forecasting unbiasedness

Corporate social responsibility and media coverage

“…Although this literature is at least 40 years old, academic interest in CSR has not abated. For example, recent studies examine the relation between CSR and cost of capital (El Ghoul et al 2011), cost of bank loans (Goss and Roberts 2011), earnings management (Kim et al 2012), analyst forecast errors (Becchetti et al 2013), access to finance (Cheng et al 2013), stock price crash risk (Kim et al 2014b), and local political orientation (Di Giuli and Kostovetsky 2014). We add to this literature by documenting a previously unexplored incentive for firms engaging in CSR, i.e., active media management.…”

Corporate social responsibility and the wealth gains from dividend increases

“…Likewise, Gelb and Strawser () find that firms with more CSR investments provide more financial disclosure. Becchetti, Ciciretti, and Giovannelli () also report that higher CSR quality contributes to making earnings forecasts unbiased. In addition, socially responsible firms engage in less bad news hoarding, which reduces price crash risk (Kim et al., ).…”

Delegated portfolio management under ambiguity aversion

“…However, if a risk-neutral investor believes that expected returns of green assets are easier to predict because of a more transparent governance, as claimed by some advocates of Corporate Social Responsibility (see e.g. [1]), this would affect her own level of ambiguity aversion and, as shown by Fig. 2, decrease the compensation factor for the portfolio manager.…”

“…According to some studies (see e.g. [1] and the references therein), estimates on Socially Responsible stocks are more trustworthy, because Social Responsibility involves a more transparent management. An agent who adopts this view may assign lower values to the level of ambiguity aversion of Socially Responsible stocks.…”

“…This example is interesting because we can compare two opposite effects due to the restriction of the investment set, the first one negative, because of the ruled out investment opportunities, the second one positive, because more socially responsible firms may be, according to some professionals and academics [1], more ''transparent'' and hence more desirable for an ambiguity averse decision maker. For details, the reader is referred to the extended version of our paper [16].…”