Corporate goodness and shareholder wealth

Abstract

archive ouverte unige archive-ouverte.unige.ch article scientifique article 2015 published version open access this is the published version of the publication, made available in accordance with the publisher’s policy. corporate goodness and shareholder wealth krueger, philipp how to cite krueger, philipp. corporate goodness and shareholder wealth. in: journal of financial economics, 2015, vol. 115, n° 2, p. 304.329. this publication url: archive-ouverte.unige.ch/unige:85431 © this document is protected by copyright. please refer to copyright holder(s) for terms of use. corporate goodness and shareholder wealth∗ philipp kr¨uger† journal of financial economics forthcoming first version: january 30, 2012 this version: july 7, 2014 abstract using a unique data set, i study how stock markets react to positive and negative events concerned with a firm’s corporate social responsibility (csr). i show that investors respond strongly negatively to negative events and weakly negatively to positive events. i then show that investors do value “offsetting csr”, that is positive csr news concerning firms with a history of poor stakeholder relations. in contrast, investors respond negatively to positive csr news which is more likely to result from agency problems. finally, i provide evidence that csr news with stronger legal and economic information content generates a more pronounced investor reaction. jel-classification: m14, g14, g24, d21, l21 keywords: social and environmental …

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