Market reactions to CSR news in different industries

PurposeBased on the premises of the institutional theory, in this paper, we explore the effects that the media coverage of positive and negative Corporate Social Responsibility (CSR) news have on the stock market value of companies in diverse industries.Design/methodology/approachUsing a sample of 1...

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Bibliographic Details
Published in:Corporate communications 2020-05, Vol.25 (2), p.243-261
Main Authors: Pérez, Andrea, García de los Salmones, María del Mar, López-Gutiérrez, Carlos
Format: Article
Language:English
Subjects:
Abnormal returns
Business communications
Environmental impact
Finance
Investments
Investors
Literature reviews
Market value
Media coverage
Rates of return
Regression analysis
Reputations
Securities markets
Social responsibility
Stakeholders
Stock exchanges
Stock prices
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Summary:PurposeBased on the premises of the institutional theory, in this paper, we explore the effects that the media coverage of positive and negative Corporate Social Responsibility (CSR) news have on the stock market value of companies in diverse industries.Design/methodology/approachUsing a sample of 195 online articles published in the most important Spanish business newspaper, we implement an event study and a regression analysis.FindingsThe findings show that positive and negative CSR news, usually, have significant impacts on the stock market value of companies. Specifically, the market reaction is stronger under the announcement of negative news in all industries (i.e. basic, energy, finance and goods and services), although positive news also cause significant positive stock market reactions in the finance and basic industries.Originality/valueAlthough the media plays an indispensable role in the dialogue around CSR, much of the research focused on the role of the media on the CSR-CFP link does not consider how the industry variable can affect the abnormal stock returns derived from CSR news. This research contributes to this gap in the literature by exploring the differences that exist in the stock market reactions to CSR news based on the industry in which the companies operate.
ISSN:1356-3289
1758-6046
DOI:10.1108/CCIJ-05-2019-0056