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http://dx.doi.org/10.5762/KAIS.2015.16.9.5836

Valuation Effects of Corporate Social Responsibility: The Evidence from Supply Contracts in Korea  

Kim, Noolee (College of Business and Economics, Hanyang University-ERICA)
Kwon, Kyoung-Min (College of Business Administration, Hongik University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.16, no.9, 2015 , pp. 5836-5842 More about this Journal
Abstract
We examine the effect of Corporate Social Responsibility activities on the value of corporations through the supply contracts with customers, one of important stakeholders. The analyses using KEJI index and supply contract announcements show that the likelihood of involving in a supply contract is lower and the announcement return is lower when CSR performance is higher. However, this negative effect of CSR is different across the level of CSR performance. The negative effects of CSR do not exist in the firms with highest level of CSR performance while most of the negative effects are concentrated in the firms with mediocre performance in CSR. These results indicate that market recognizes not best CSR activities but mediocre CSR activities as sacrifice of shareholder value.
Keywords
Corporate Social Responsibility; Valuation; Stakeholder; Supply Contract;
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