Impact of Publicizing Corporate Social Responsibility on Firm Value

Seok, Junhee; Lee, Youseok; Go, Sarang; Kim, Byung-Do

doi:10.17287/kmr.2017.46.6.1663

Cited by 2 publications

(6 citation statements)

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“…That is, firms that make large amounts of donation expenditures seem to have high firm values. It can be seen that the correlations between the remaining variables are not much different from the values in previous studies (Hong, 2016 [20]; Seok et al, 2017 [29]). *, **, and *** indicate significance at p < 0.10, p < 0.05, and p < 0.01, respectively, with two-tailed probability levels for variables.…”

Section: Data and Sample Selectioncontrasting

confidence: 49%

Chaebol Firms’ Donation Activities and Firm Values

Hong

2019

Sustainability

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This paper aims to investigate the effects of donation activities of chaebol firms on their firm values. The firm values will vary depending on capital market participants’ view on the donation activities of chaebol firms. To verify this hypothesis, data of firms listed in the Korea Composite Stock Price Index (KOSPI) from 2001 to 2017 are empirically analyzed. Whether a firm is a chaebol firm or not is assessed by whether the firm has been designated as a firm in one of the large business groups announced by the Korea Fair Trade Commission, and firm values are measured by Tobin’s Q and market-to-book value ratio (MTB). The results of analysis indicated that donation activities of chaebol firms were negatively related to firm values. The donation activities of chaebol firms seem to be not positively evaluated in the capital market. This paper is meaningful in that it verified how capital market participants evaluate the donation activities of chaebol firms, which account for a large portion of the South Korean economy. To gain public support, chaebol firms should strive to truly fulfill their social responsibilities.

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Section: Data and Sample Selectioncontrasting

confidence: 49%

Chaebol Firms’ Donation Activities and Firm Values

Hong

2019

Sustainability

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“…Empirical studies on the effectiveness of CSR activities at the firm level identify financial performanceincluding firm value and return on investmentas a noteworthy dependent variable (Gallego-Alvarez et al, 2010;Luo and Bhattacharya, 2006;Seok et al, 2017;Servaes and Tamayo, 2013;Tang et al, 2012;Waddock and Graves, 1997). Specifically, Waddock and Graves (1997) found that a firm's strong financial performance in the previous year positively impacts its performance of CSR activities in the current year, which in turn positively impacts its financial performance in the next period.…”

Section: Theoretical Background 21 Consequences Of Csr Activitiesmentioning

confidence: 99%

“…The inconsistent results on the link between CSR activities and financial performance could be explained by whether the study in question examines the effect of CSR activities on stakeholder awareness (Bhattacharya and Sen, 2004;McWilliams and Siegel, 2001;Schuler and Cording, 2006;Servaes and Tamayo, 2013;Seok et al, 2017). Along these lines, it is helpful to note that if individuals do not know whether a company conducts CSR activities, then they cannot form positive attitudes toward that company.…”

Section: Theoretical Background 21 Consequences Of Csr Activitiesmentioning

confidence: 99%

“…Agenda-setting theories thus suggest that media coverage is a very effective way of improving public awareness of an event. Taking this to task, some research proposes that CSR might be measured based on the number of related news reports (Garcia-Sanchez et al, 2014;Seok et al, 2017). In other words, CSR's impact on firm value depends not on the absolute level of a firm's CSR activities but instead on the degree to which media coverage makes stakeholders aware of CSR activities.…”

Section: The Effects Of Csr News Reportsmentioning

confidence: 99%

“…First, CSR news reports were measured by identifying the number of news stories describing the CSR activities of each analyzed corporation (Garcia-Sanchez et al, 2014), limiting its search to the top 13 newspapers in Korea between 2011 and 2014. Because the amount of news about CSR activities could be a proxy for the degree of effort a firm made to publicize its CSR activities, it was the most appropriate variable for this study (Garcia-Sanchez et al, 2014;Seok et al, 2017;Sheng and Lan, 2019). Second, data on WOM were collected from Social Metrics, a large data mining platform provided by Daumsoft that analyzes big data using natural language processing technology.…”

Section: The Moderating Role Of Advertising Levelmentioning

confidence: 99%

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Impact of CSR news reports on firm value

Seok

Lee

Kim

2020

APJML

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PurposeThis study clarifies the relationship between corporate social responsibility (CSR) news reports and firm value and identifies the mechanisms that constitute this relationship. Specifically, it identifies the roles of word of mouth (WOM) and traditional advertising in this relationship.Design/methodology/approachThe data set used for the analysis covers 77 firms in Korea from 2012 to 2015. The random-effects model is applied to verify three hypotheses. Using a three-step regression analysis and the Sobel test, this study reveals the roles of WOM and advertising expenditure in the relationship between CSR news reports and firm value.FindingsCSR news reports positively affect firm value, and this relationship is mediated by WOM and moderated by advertising expenditure. Notably, the positive effect of WOM on firm value is stronger for companies that spend less on advertising.Practical implicationsThe evidence implies that marketing managers could benefit from not only conducting CSR activities but also widely publicizing them. CSR news reports could help companies enhance public awareness of and interest in them.Originality/valueThis is the first study to investigate the influence of CSR news reports using empirical data in Korea.

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Impact of Publicizing Corporate Social Responsibility on Firm Value

Cited by 2 publications

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Chaebol Firms’ Donation Activities and Firm Values

Chaebol Firms’ Donation Activities and Firm Values

Impact of CSR news reports on firm value

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