Business Commons^™

The Risk Of Being Ranked: Investor Response To Marginal Inclusion On The 100 Best Corporate Citizens List, Ben William Lewis, W. Chad Carlos

Faculty Publications

Despite the proliferation of lists and rankings that recognize firms for superior performance, empirical studies have been limited in their ability to causally evaluate how inclusion for the marginal firm influences shareholder value. Using a regression discontinuity design, we address this limitation by examining how investors responded to firms that were just barely included or excluded from the 100 Best Corporate Citizens list. Contrary to prevailing theoretical expectations, our findings indicate that marginal firms that were included in the ranking experienced negative abnormal returns compared to marginal firms that were excluded. We discuss how these findings inspire future research on …