A Study of the Relationship between Corporate Social Responsibility Report and the Stock Market

Abstract

This study mainly investigates the relationship between corporate social responsibility (CSR) reporting and the reaction in the stock market. Specifically, we utilize the data from Taiwanese stock market from 2012 to 2017 to examine whether the CSR report disclosed by the listed companies on the Taiwan Stock Exchange and the Taipei Exchange will cause abnormal returns on the short-, mid- or long-term horizon. The empirical results demonstrate that companies which disclose their CSR reports generate higher and more positive mid- to long-term abnormal returns than undisclosed companies. In addition to filling the gap of previous studies, this study also examines whether CSR reports mitigate the information asymmetry between management and stakeholders. Companies disclosing their CSR reports will boost the confidence of investors and lead to higher stock return valuations.

The influence of Twitch and sustainability on the stock returns of video game companies: Before and after COVID-19

“…These results confirm H1, H3, and H4 and are consistent with Johnson and Woodcock, 2019 , Kim and Kim, 2022 , and Oh and Kim (2022) , as they highlight the relevance of Twitch for video game companies. Also agree with Cheung, 2011 , Friede et al, 2015 , Zhang et al, 2018 , Chiu et al, 2020 among others on the existence of a positive influence of sustainability on stock returns, in this case, of video game companies.…”

“…Many studies have demonstrated a positive relationship between sustainability and increased performance ( Ziegler et al, 2007 , Chiu et al, 2020 , Lee and Suh, 2022 ; etc). Friede et al (2015) conducted a meta -analysis of approximately 2200 empirical studies in various areas, accounting, economics, finance, and management, and stated that “the business case for ESG investing is empirically very well founded.” “Roughly 90 % of studies find a nonnegative Environmental, Social and Governance (ESG) - Corporate Financial Performance (CFP) relation.…”

“…Similarly, Zhang et al (2018) demonstrate a positive relationship between sustainability engagement and stock returns; specifically, they show that the publication of sustainability news positively affects the volatility of a company's stock returns. Chiu et al (2020) showed that companies that publish their corporate social responsibility (CSR) reports generating higher returns than those that do not.…”

“…Another important change that has recently occurred is the rise in sustainability concerns. Recent studies have shown that sustainability positively influences investors and the performance of sustainable companies ( Ziegler et al, 2007 , Zhang et al, 2018 , Friede et al, 2015 , Chiu et al, 2020 ) although some are dubious ( Gillan et al, 2021 , Larcker et al, 2022 ). However, very few studies have analyzed the sustainability of video game companies and their relationship with their returns.…”

Mandatory CSR Disclosure, CSR Assurance, and the Cost of Debt Capital: Evidence from Taiwan

“…According to statistics from the CSRone sustainability reporting platform, there has been a dramatic increase in the number of CSR reports published in recent years, with more than half of all listed companies obtaining CSR assurance services from third parties for their CSR reports in Taiwan. The use of a third party for assurance has been shown to enhance trust in the content of reports [2][3][4], in accordance with the reputation of the organization that prepared it. Investors who are confident in the verity of disclosed CSRrelated information are more likely to regard the firm as a safe or worthy investment, and stakeholders can use this information to gain insights into the nonfinancial operations of the firm.…”