Do CSR Activities Increase Firm Value? Evidence from the Korean Market

Chung, Chune Young; Jung, Sangjun; Young, Jason

doi:10.3390/su10093164

Cited by 86 publications

(94 citation statements)

References 60 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…They further find that the internal controls moderate the relationship between CSR and crash risk. Consistently, Chung et al [21] find a positive relation between CSR and firm value proxied by Tobin's Q. As CSR is a form of corporate disclosure, other studies compare CSR to quality of accounting information.…”

Section: Prior Research On Corporate Social Responsibility Activitiesmentioning

confidence: 77%

Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea

Lee

Choi

2018

Sustainability

View full text Add to dashboard Cite

Few studies examine how firms make strategic decisions over time. In this study, we test whether a firm undertakes corporate social responsibility (CSR) activities as a function of its life-cycle stage. Drawing on prior CSR research that finds ethical concerns and opportunistic behavior to be two key motivations that underpin CSR activities, we hypothesize that firms in their growth stage are positively associated with CSR, while firms in stage of decline are less likely to invest in CSR. The empirical findings of our study—derived by leveraging a sample of South Korean listed firms—are consistent with these predictions. We further find that in the growth stage, group-affiliated firms are more engaged in CSR than are unaffiliated firms. Given that affiliated firms can share the resources of other group-member firms, this evidence supports the slack resource hypothesis. Overall, our results indicate that firms have different CSR strategies, depending on their life-cycle stage.

show abstract

Section: Prior Research On Corporate Social Responsibility Activitiesmentioning

confidence: 77%

Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea

Lee

Choi

2018

Sustainability

View full text Add to dashboard Cite

show abstract

“…Prior studies, for example, Drucker () and Mackey, Mackey, and Barney (), have taken a more economic‐based perspective to assess the benefit of CSR engagement for a firm. Better CSP enhances corporate image, reputation (Fombrun & Shanley, ; McWilliams, Siegel, & Wright, ), and firm value (Chung, Jung, & Young, ). In the meanwhile, consumer loyalty towards and support for the firm are also increased (Godfrey & Hatch, ; Mackey et al, ).…”

Section: Theory and Hypothesesmentioning

confidence: 99%

Socially responsible investment returns and news: Evidence from Asia

Yen

Shiu

Wang³

2019

Corp Soc Responsibility Env

View full text Add to dashboard Cite

We set out in this study to examine (a) whether "socially responsible investment" (SRI) portfolios can outperform less-SRI portfolios in the emerging Asian stock markets and (b) whether investors within these emerging markets achieve awareness of SRI through publicly available news. On the basis of 2009-2013 data, we find that SRI portfolios tend to perform better in Japan. However, firms in the emerging Asian markets do not earn rewards for superior corporate social responsibility (CSR) practices. We also find that investors in the emerging Asian markets are indeed aware of SRI through public CSR news releases; in particular, investors in these markets reward high environmental-, social-, and governance-rated firms for their good CSR practices advertised through such news releases, relative to those with no news releases. KEYWORDScorporate social responsibility, individual investors, news advertisement effect, socially responsible investment

show abstract

“…Panel B of Table 2 shows the industry distribution and its proportions following KSIC codes. We use the KSIC as an industry standard to classify the sample [37]. The Korean government provides the KSIC to describe the domestic industry structure.…”

Section: Sample Selectionmentioning

confidence: 99%

“…The sample composition is similar to the industry proportion of prior studies investigating the relationship between the characteristics of the audit and market perceptions in Korea [16,37]. The Korean economy developed under a government-initiated industrial policy.…”

Section: Sample Selectionmentioning

confidence: 99%

How Investors Perceive Mandatory Audit Firm Rotation in Korea

Kim¹,

Kim

Lee

et al. 2019

Sustainability

View full text Add to dashboard Cite

Credible audit quality is a precondition for a firm’s sustainability. External auditors offer assurance with regard to the uncertain factors that can jeopardize a firm’s sustainability and provide audit opinions that help investors assess risk. After the global crisis and accounting scandals, mandatory audit firm rotation has been implemented globally. However, few studies have investigated either the cost or the benefit of mandatory audit firm rotation. Prior studies provide only indirect evidence on the effects of audit firm tenure on audit quality/perceived audit quality. By discussing prior arguments, we examine how investors perceive the implementation of mandatory audit firm rotation in Korea. Using a unique and direct setting to examine our research question, we analyze the relationship between firms with mandatorily switched audit firms and the cost of equity capital from 2006 to 2008. We find that the mandatory change in the auditors has a negative association with the cost of equity capital. The results are robust to using the arithmetic mean of the cost of equity capital, lagged control variables, and the manufacturing industry effect. The results indicate that investors perceive that mandatory audit firm rotation provides an environment for qualified audits by enhancing auditor independence and skepticism, and thus decreases the cost of equity capital. This study helps to improve our understanding of the impact of mandatory audit firm rotation the information risk evaluations and provides political implications for policy makers by showing the benefit of mandatory audit firm rotation.

show abstract

Do CSR Activities Increase Firm Value? Evidence from the Korean Market

Cited by 86 publications

References 60 publications

Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea

Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea

Socially responsible investment returns and news: Evidence from Asia

How Investors Perceive Mandatory Audit Firm Rotation in Korea

Contact Info

Product

Resources

About