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A Learning Curve Of The Market: Chasing Alpha Of Socially Responsible Firms, Zhichuan Li, Jun Wang, Dylan Minor, Chongyu Dang
A Learning Curve Of The Market: Chasing Alpha Of Socially Responsible Firms, Zhichuan Li, Jun Wang, Dylan Minor, Chongyu Dang
Business Publications
This paper explores stock market reactions to corporate social performance. We find that a value-weighted portfolio based on the list of “100 Best CSR companies in the world”, published by Reputation Institute, yields statistically significant annual abnormal returns of 1.63% and 1.26%, by controlling for Carhart four factors and Fama-French five factors, respectively (2.39% and 1.84% respectively for an equal-weighted portfolio). Moreover, such abnormal returns decrease as time goes, especially after the inaugural publication of the CSR lists in 2013. The paper also indicates that companies with better social performance are more likely to have positive earnings surprises, and that …
Csr-Contingent Executive Compensation Contracts, Zhichuan Li
Csr-Contingent Executive Compensation Contracts, Zhichuan Li
Business Publications
Firms have increasingly started tying their executives’ compensation to CSR-related objectives. In this paper, we attempt to understand why firms offer CSR-contingent compensation and the conditions under which such compensation improves corporate social performance. Using hand-collected data from proxy statements, we find that this emerging compensation practice varies significantly across industries and across different CSR categories. Further, well-governed firms are more likely to offer CSR-contingent compensation, and such compensation does lead to higher corporate social standing. Such firms are more likely to offer formula-based, Objective CSR-contingent compensation. However, our results suggest that non-formulaic, Subjective CSR-contingent compensation also helps improve companies’ …
The Effect Of Corporate Visibility On Corporate Social Responsibility, Zhichuan Li, Taylor Morris, Brian Young
The Effect Of Corporate Visibility On Corporate Social Responsibility, Zhichuan Li, Taylor Morris, Brian Young
Business Publications
Outside of direct ownership, the general public may feel it is an implicit stakeholder of a firm. As the public becomes more vested in a firm’s actions, the firm may be more likely to engage in Corporate Social Responsibility (CSR) activities. We proxy for the public’s stake in a firm with public visibility. Based on 3,400 unique newspaper publications from 1994 to 2008, we measure visibility for the U.S. S&P 500 firms with the frequency of print articles per year concerning the firm. We find that visibility has a signficant, positive relationship with the CSR rating. Evidence also suggests this …
Product Categories As Judgment Devices: The Moral Awakening Of The Investment Industry, Diane-Laure Arjaliès, Rodolphe Durand
Product Categories As Judgment Devices: The Moral Awakening Of The Investment Industry, Diane-Laure Arjaliès, Rodolphe Durand
Business Publications
Product categories are more than classification devices that organize markets; when reflecting market actors' purposes, they are also judgment devices. Taking stock of the literature on product categories and drawing on the distinction between the faculties of knowing and judging, we elaborate a framework that accounts for how and why market actors include or exclude normative attributes in a product category definition. Based on a field study of the development of Socially Responsible Investment (SRI) funds in France, we describe the phases and conditions of a judgment framework for category definition, for both established and nascent categories. We discuss implications …
Product Categories As Judgment Devices: The Moral Awakening Of The Investment Industry, Diane-Laure Arjalies
Product Categories As Judgment Devices: The Moral Awakening Of The Investment Industry, Diane-Laure Arjalies
Business Publications
Product categories are more than classification devices that organize markets; when reflecting market actors' purposes, they are also judgment devices. Taking stock of the literature on product categories and drawing on the distinction between the faculties of knowing and judging, we elaborate a framework that accounts for how and why market actors include or exclude normative attributes in a product category definition. Based on a field study of the development of Socially Responsible Investment (SRI) funds in France, we describe the phases and conditions of a judgment framework for category definition, for both established and nascent categories. We discuss implications …