The informational relevance of corporate social responsibility: evidence from DS400 index reconstitutions

Abstract

This study examines the relationship between corporate social responsibility and financial performance by analyzing the intra-industry wealth impact of additions and deletions to the Domini Social 400 index. Results from the event study analysis indicate that additions to the index generate a positive share price response for the announcement firm and a negative response by rival firms. The opposite reaction is observed for index deletions. Additionally, the share price response is more pronounced for informationally opaque industries. Our study highlights the importance of external monitoring agencies in providing meaningful information that helps resolve investor uncertainty regarding the quality of a firm's relationships with its primary stakeholders.

Triangulating Environmental Performance: What Do Corporate Social Responsibility Ratings Really Capture?

“…Whether these theoretical predictions also hold in reality has been the subject of a great number of studies (Barnett & Salomon, 2006;Brammer & Millington, 2008;Dowell, Hart, & Yeung, 2000;King & Lenox, 2001;Marcus & Fremeth, 2009;Ramchander, Schwebach, & Staking, 2012;Russo & Fouts, 1997;Sharfman & Fernando, 2008;Waddock & Graves, 1997). Yet despite this large body of research, much uncertainty about the significance of the relationship remains.…”

How information-sharing values influence the use of information systems: An investigation in the business intelligence systems context

“…In terms of information evaluation, it appears that it is this aspect of IQ -linked both with fulfilling current as well as predicted needs as judged by the user -the most important in respect of information value (Darlington et al, 2008;Eppler, 2006). Such understanding about the significance of Re in valuing information has been emphasized in various fields, such as accounting (Lee, 1971), manufacturing planning and control (Gustavsson and Wänström, 2009) and corporate social responsibility (Ramchander et al, 2012). Based on the above we put forward the following hypotheses: Hypothesis 2A (H 2 A).…”

An Investor's Perspective on Infectious Diseases and Their Influence on Market Behavior

“…The biotechnology industry is committed to developing new products and producing economic rewards for the long term (Niosi 2003). Investors and shareholders are not myopic in their analysis of the true value of an emerging company (McMillan, Thomas 2005;Namara, Baden-Fuller 2007;Wang 2009;Ramchander et al 2012). The outbreak of an infectious disease may be long or short term, but overall stock performance within the biotechnology industry is as yet unknown.…”

“…An event study is widely applied to determine whether there has been any information effect on the stock performance around the announcement date in different events (Davidson et al 1987;Rajiv et al 1993;Bradford, Robinson 1997;Patten, Nance 1998;Pantzalis et al 2000;Chen, Su 2010;Lai et al 2010;Ramiah et al 2010;Asgharian et al 2011;Cheung 2011;Li, Tallman 2011;Ramchander et al 2012). Recent literature used event study to measure the effect of specific events, such as the effect of the Alaskan oil spill on the stock performance of petroleum companies and the effect of war on the stock performance of transportation companies.…”