Corporate Controversy, Social Responsibility and Market Performance: International Evidence-湖南大学经济管理研究中心
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Corporate Controversy, Social Responsibility and Market Performance: International Evidence

来源:湖南大学经济与管理研究中心 日期:2017-12-28 作者:

Topic:Corporate Controversy, Social Responsibility and Market Performance: International Evidence

Speaker:Prof.Jialong Li

Assistant professor of CEFMS

Time:10:00 AM, Dec.29th

Location:Administration Building Room 401

AbstractPast research has looked at the financial benefits that Corporate Social Responsibility (hereafter CSR) can bring through better stakeholder relations via increased legitimacy and reputation. In particular, ex ante CSR can protect the firm from the ex post repercussions of a negative event due to the prior accumulation of moral capital with stakeholders (Godfrey, 2005); In this study, we address this gap by not only looking at how companies can use CSR to respond to controversies, but more specifically, we direct our attention to whether firms use symbolic or substantive CSR ex post, that is, as a strategic response to a controversy. We argue that in the event of a controversy, firms will try to repair the incremental damage to their legitimacy, reputation and stakeholder relations by engaging in CSR that is symbolic in nature, i.e. they will engage in CSR for the sole purpose of bringing their stakeholder relationships to the pre-controversy level, and such engagement will be valued by stockholders. We further study the moderating role of country-level trust and argue that, in countries with higher trust levels, stockholders will tend to value the firms’ engagement in symbolic CSR more. We test and find reasonable support for our hypotheses in a sample of 2,613 firms from 39 countries using information from databases like Sustainalytics, Compustat, World Values Survey and Worldwide Governance Indicators.

Introduction of speaker:

Dr. Jialong Li earned his Ph.D degree in Finance at the University of Manitoba in Canada and joined the Center for Economics, Finance and Management Studies (CEFMS) at Hunan University in fall 2017 as an assistant professor in Finance. His research primarily focuses on corporate finance, corporate governance, entrepreneurial finance and family business. His recent papers have been published in European Journal of Finance, Journal of International Financial Markets, Institutions and Money and Finance research letters. He plans to teach corporate finance and advanced corporate finance in the center.