Corporate social responsibility, business group affiliation and shareholder wealth: evidence from an emerging market

Velayutham, Eswaran ORCID: https://orcid.org/0000-0003-2492-5668 and Ratnam, Vijayakumaran (2022) Corporate social responsibility, business group affiliation and shareholder wealth: evidence from an emerging market. Social Responsibility Journal, 18 (4). pp. 723-743. ISSN 1747-1117


Abstract

Purpose: This paper aims to examine the relationship between corporate social responsibility (CSR) and shareholder wealth arising from announcement returns of security issuance from a frontier market. It also explores the role of business group affiliation (BGA) on this relationship. Design/methodology/approach: The study uses short-term scenarios to examine the link between CSR and shareholder wealth using the event study methodology which helps us mitigate the reverse causality problems related to studies of the relationship between CSR and firm value. Abnormal returns surrounding the security issue announcements were generated using the market model. Findings: This paper finds that security issuers with high CSR scores are associated with higher shareholder value. However, this paper finds that CSR activities of security issuers with BGA are value-destroying which is consistent with the agency perspective of CSR. Research limitations/implications: This study is limited to only one nascent market, namely the Colombo Stock Exchange. Originality/value: This study documents that CSR and BGA are important determinants, among others, of stock price reactions to security offerings in emerging markets.


Statistics for USQ ePrint 44929
Statistics for this ePrint Item
Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Files associated with this item cannot be displayed due to copyright restrictions.
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Business (18 Jan 2021 -)
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Business (18 Jan 2021 -)
Date Deposited: 22 Dec 2021 05:59
Last Modified: 29 Jun 2022 00:10
Uncontrolled Keywords: agency theory, emerging market, corporate social responsibility, shareholder wealth, event study, business group affiliation, debt-equity issuance
Fields of Research (2008): 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150201 Finance
Fields of Research (2020): 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3502 Banking, finance and investment > 350201 Environment and climate finance
Socio-Economic Objectives (2008): C Society > 94 Law, Politics and Community Services > 9401 Community Service (excl. Work) > 940199 Community Service (excl. Work) not elsewhere classified
Socio-Economic Objectives (2020): 11 COMMERCIAL SERVICES AND TOURISM > 1102 Financial services > 110299 Financial services not elsewhere classified
Identification Number or DOI: https://doi.org/10.1108/SRJ-08-2020-0337
URI: http://eprints.usq.edu.au/id/eprint/44929

Actions (login required)

View Item Archive Repository Staff Only