No abstract

No abstract

This study examines how firm value (measured via stock prices) is related to corporate social responsibility (CSR) disclosure and how the institutional environment influences this relationship. To test our hypotheses, we apply textual analysis to our data on firms listed in the STOXX Europe 600 for the period 2008-2016. Our investigation of topic-specific CSR disclosure indicates that when firms shifted from voluntary to mandatory reporting, following the announcement of Directive 2014/95/EU, the association between their share price and CSR disclosure became significantly negative. For the period before the announcement, this relationship is either positive or statistically insignificant. We also show that the institutional environment can impact this relationship in four distinct ways: the level of CSR awareness, the level of employee protection, the degree of enforcement and the strength of the legal environment. We find that the first two have a negative impact on the incremental value relevance of specific CSR disclosure, whereas the last two have a positive impact. Lastly, our results also indicate that the magnitude of (a) the relationship between a firm's CSR disclosure and its value and (b) the impact that the firm's institutional environment has on this relationship depends on the specific CSR topics.

In this study, we investigate the estimates of the convenience yield implied in European natural gas hub trading. In addition to the net convenience yield, we provide two option-based approaches, which connect to the economic idea of the convenience yield as being the benefits from holding the physical commodity. In particular, we approximate the convenience yield via lookback and Asian options. Our empirical results are consistent with the intuition conveyed by the theory of storage. We conclude that the choice of an adequate approximation method should depend on the market under investigation, in particular, on the existence of market frictions such as short-sale constraints or restricted storage access.

No abstract