Outline
- Abstract
- 1. Introduction
- 2. Prior Literature and Hypothesis Development
- 2.1. Csr Performance and Information Asymmetry
- 2.2. Csr Performance Vs. Information About Csr Performance
- 2.3. Kld Csr Scores Vs. Firm Disclosure of Csr Performance
- 2.4. Kld As an Information Intermediary
- 2.5. Csr Performance and Informed Investors
- 3. Data and Sample Selection
- 3.1. Data
- 3.2. Sample Selection
- 4. Research Design
- 5. Results
- 5.1. Descriptive Statistics
- 5.2. Multivariate Results
- 5.3. Additional Tests
- 6. Conclusion
- Acknowledgements
- Appendix a
- References
رئوس مطالب
- چکیده
- 1. مقدمه
- 2. پیشینه مطالعه و بیان مسئله
- 2.1. عملکرد CSR و عدم تقارن اطلاعات
- 2.2 ملکرد CSR و اطلاعاتی درباره عملکرد CSR
- 2.3. نمرات KLD CSR و افشاء شرکت از عملکرد CSR
- 2.4. KLD به عنوان یک واسطه برای اطلاعات
- 2.5. عملکرد CSR و سرمایه گذاران آگاه
- 3. انتخاب نمونه و داده
- 3.1. داده
- 3.2. انتخاب نمونه
- 4. طراحی پژوهش
- 5. نتایج
- 5.1. آمار توصیفی
- 5.2. نتایج چند متغیره
- 5.3. آزمون های اضافی
- 6. نتیجه گیری
- تقدیر و تشکر
Abstract
Using Corporate Social Responsibility (CSR) performance scores from KLD STAT, we investigate whether CSR performance affects information asymmetry. We find that both positive and negative CSR performance reduce information asymmetry. Moreover, we find that the influence of negative CSR performance is much stronger than that of positive CSR performance in reducing information asymmetry. We also investigate the effect of informed investors on the CSR performance-asymmetry relation. We find that the negative association between CSR performance and bid-ask spread decreases for firms with a high level of institutional investors compared to those with a low level of institutional investors. This finding suggests that informed investors may exploit their CSR information advantage. Overall, our results suggest that CSR performance plays a positive role for investors by reducing information asymmetry and that regulatory action may be appropriate to mitigate the adverse selection problem faced by less-informed investors.
Conclusions
Regulatory, consumer, societal, and government attention to CSR appears to be on the increase in recent years. In this study, we attempt to add new insights to the literature on CSR performance by focusing on the relationship between CSR performance and capital market information asymmetry. Specifically, we investigate whether CSR performance reduces the bid-ask spread, a proxy for information asymmetry, and how institutional ownership affects the association between CSR performance and the bid-ask spread.
Using CSR performance information compiled by KLD, we find that both positive and negative CSR performance scores appear to provide information that reduces information asymmetry. Additional analyses show that negative CSR performance has a greater impact on reducing bid-ask spread than does positive CSR performance. This evidence suggests that future studies in the context of capital markets should avoid working with net scores so as to avoid the loss of information contained in the underlying component scores. We further find a significant positive association between the bid-ask spread and the interaction term of institutional ownership and CSR activities, indicating that institutional investors with private CSR performance information appear to exploit that information advantage in a way that attenuates the reduction in information asymmetry.
This paper makes several contributions to the literature. First, our study assesses an unexplored consequence of CSR performance that enhances our understanding of its role in capital market valuation. Second, we document the important role of negative CSR performance, which has been ignored in prior studies. Finally, our study adds evidence about the role of informed investors with respect to the processing of CSR performance. These findings suggest that if policymakers are looking to level the playing field with respect to the availability of CSR performance information, requiring more timely and integrated reporting of both positive and negative CSR performance and mandating a standardized CSR disclosure format may be fruitful.