Abstract:This paper investigates trading around Corporate Social Responsibility (CSR) rating announcements. Focusing on CSR rating announcements made by Vigeo on European markets, we use Euronext intraday data to prove that trading volume drops sharply before announcements and increases afterwards. Willingness to trade depends mainly on prior private information and the content of the announcement. Our results show effects from disaggregated scores, but not from overall scores. More specifically, we find that some topi… Show more
“…Corporate social responsibility (CSR) practices can impact firm value around the world (e.g., Benlemlih & Girerd‐Potin, ; Cellier, Chollet, & Gajewski, ; Gregory, Whittaker, & Yan, ). Cellier et al.…”
Section: Literature Review and Hypothesis Developmentmentioning
confidence: 99%
“…Cellier et al. () study firms whose shares are traded on Euronext and find that announcements of CSR ratings have a significant impact on stock trading. Based on a sample from 25 countries, Benlimlih and Girerd‐Potin () show that favorable CSR ratings significantly reduce firms’ idiosyncratic risk in civil law countries but not in common law countries.…”
Section: Literature Review and Hypothesis Developmentmentioning
We identify firm innovation as a channel through which the treatment of employees affects firm value. Long-term incentive theory supports positive effects of 'good' employee treatment on innovation. Alternatively, entrenchment theory suggests such treatment will lead to complacency and shirking, hence deterring innovation.These opposing views merit investigation since human capital is increasingly essential to the growth and success of a firm. Using the KLD database and patent/citation data, we find a significant positive relationship between favorable employee treatment and the innovation quantity and quality of a firm. Furthermore, we find that the positive treatment of employees improves innovation focus -more innovation related to firms' core business, leading to greater firm value via the increased economic value of patents. These findings, robust to endogeneity concerns, provide support for the long-term incentive hypothesis, suggesting that well-treated employees increase firm innovation. Thus, firm innovation represents a channel through which positive employee treatment enhances firm value.
K E Y W O R D Scorporate social responsibility (CSR), employee treatment, human capital, patents and citations, technological innovation
“…Corporate social responsibility (CSR) practices can impact firm value around the world (e.g., Benlemlih & Girerd‐Potin, ; Cellier, Chollet, & Gajewski, ; Gregory, Whittaker, & Yan, ). Cellier et al.…”
Section: Literature Review and Hypothesis Developmentmentioning
confidence: 99%
“…Cellier et al. () study firms whose shares are traded on Euronext and find that announcements of CSR ratings have a significant impact on stock trading. Based on a sample from 25 countries, Benlimlih and Girerd‐Potin () show that favorable CSR ratings significantly reduce firms’ idiosyncratic risk in civil law countries but not in common law countries.…”
Section: Literature Review and Hypothesis Developmentmentioning
We identify firm innovation as a channel through which the treatment of employees affects firm value. Long-term incentive theory supports positive effects of 'good' employee treatment on innovation. Alternatively, entrenchment theory suggests such treatment will lead to complacency and shirking, hence deterring innovation.These opposing views merit investigation since human capital is increasingly essential to the growth and success of a firm. Using the KLD database and patent/citation data, we find a significant positive relationship between favorable employee treatment and the innovation quantity and quality of a firm. Furthermore, we find that the positive treatment of employees improves innovation focus -more innovation related to firms' core business, leading to greater firm value via the increased economic value of patents. These findings, robust to endogeneity concerns, provide support for the long-term incentive hypothesis, suggesting that well-treated employees increase firm innovation. Thus, firm innovation represents a channel through which positive employee treatment enhances firm value.
K E Y W O R D Scorporate social responsibility (CSR), employee treatment, human capital, patents and citations, technological innovation
“…1 This type of investing is highly international, with nearly 40% of the 5.5 trillion of assets under management from oversea investors. 2 SRI ratings are important for investors as demonstrated by Cellier et al (2016), who show a decrease in trades prior to announcements, followed by a rise afterwards, indicating that investors care about announcements of extrafinancial ratings. Furthermore, Ammann et al (2018) show that the Morningstar Sustainability Rating has a huge impact on mutual fund flows, where in the first year after publication, higherrated funds receive between $4.1m and $10.1m higher net flows while lowrated funds receive between $1.0m to $5.0m lower net flows than averagerated funds.…”
This study is the first to examine the performance of technical trading in tradeable Socially Responsible Investment (SRI) indices. We employ a number of popular trend-following and meanreverting technical trading rules and find that trend-following technical trading rules offer very little predictive power or significant returns to investors. However the mean-reverting technical trading rules do offer significant returns, even after controlling for data-snooping, risk, transaction costs and out-of-sample testing. Therefore our results add to the literature by showing that meanreverting technical trading rules offer substantial predictive power in SRI indices, but traditional trend-following rules offer very little predictive power.
“…Les premières études se sont intéressées aux catastrophes écologiques ou dans la même veine à l'impact de la violation de lois sur l'environnement (Bosh et al ., 1998;Laplante et Lannoie, 1994;Little et al ., 1995;Muoghalu et al ., 1990;Capelle-Blancard et Laguna, 2010) . Les études plus récentes portent sur des événements variés tels que l'annonce d'une innovation ou initiative managériale dans le domaine de l'environnement (Ba et al ., 2012;Bose et Pal, 2012;Mathur et Mathur, 2000), la participation volontaire à un programme environnemental (Fisher-Vanden et Thorburn, 2011;Keele et DeHart, 2011) ou l'inclusion / exclusion dans un score (Cheung, 2011;Consolandi et al ., 2009;Robinson et al ., 2011), la publication d'un classement RSE (Lyon et Shimshack, 2015;Cellier et al ., 2016) . La méta-analyse effectuée par Endrikat (2016) qui porte sur un ensemble de 32 études d'événement indique que d'une part, la plupart portent sur le marché américain et que d'autre part, tout événement lié à l'environnement a un impact sur les cours boursiers mais que cet impact n'est pas symétrique, le marché réagissant plus fortement aux mauvaises nouvelles qu'aux bonnes .…”
Section: Réaction Des Marchés Boursiers à La Publication Volontaire Dunclassified
Les informations délivrées par l’entreprise sur les aspects environnementaux de son activité sont-elles prises en compte par les investisseurs ? Cet article vise à montrer que la communication d’informations environnementales provoque une réaction boursière. L’étude porte sur les groupes faisant ou ayant fait partie du CAC 40 de 2008 à 2013. Son originalité est de tester le pouvoir informationnel de la communication environnementale sur la base des 30 items environnementaux du Global Reporting Initiative (GRI), sur une longue période et pour les mêmes entreprises. Les résultats confirment que le contenu environnemental des informations communiquées par l’entreprise est tout aussi valorisé par les investisseurs que les informations financières.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.