CSR Disclosure, Political Risk and Market Quality: Evidence from the Russia-Ukraine Conflict

Clancey-Shang, Danjue; Fu, Chengbo

doi:10.2139/ssrn.4181022

Cited by 5 publications

(5 citation statements)

References 35 publications

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“…In order to test our hypotheses, we apply two pooled OLS regressions with year and industry fixed effects [85,86]. First, we regressed the CFP against CSP and GIP provided by the ASSET4 database, control variables, and dummy variables of year and industry.…”

Section: Methodsmentioning

confidence: 99%

The Controversial Link between CSR and Financial Performance: The Mediating Role of Green Innovation

Homayoun,

Mashayekhi,

Jahangard

et al. 2023

Sustainability

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The contentious relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) has been extensively and yet inconclusively debated in the sustainability literature. We further investigate the link between CSR and CFP by examining the mediating role of green innovation performance (GIP). We perform pooled ordinary least squares (OLS) analysis on a panel data of UK firms from 2006 to 2017 provided by the ASSET4 database. We find that CSR is positively and significantly associated with CFP and that GIP plays a significant and positive mediating role in this relationship. Our findings contribute to the extant sustainability literature by using a comprehensive measure of CFP and addressing the mediating effects of GIP on the link between CSR and CFP. The results provide policy, practice, and research implications as investors demand more robust CSR information, regulators establish environmental and climate change rules, and companies focus on the efficiency and effectiveness of their green innovation practices and performance.

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Section: Methodsmentioning

confidence: 99%

The Controversial Link between CSR and Financial Performance: The Mediating Role of Green Innovation

Homayoun,

Mashayekhi,

Jahangard

et al. 2023

Sustainability

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“…Once the enterprise has CSRD behavior, it will have a negative impact on the financial performance (Velte P, 2023) [4]. The better the CSR performance, the higher the financial performance, and the better CSR performance is related to the improved information transparency (Shang & Fu, 2024) [5]. In addition, actively engaging in economic, environmental and social CSR practices provides a competitive advantage, contributes to long-term viability, and attracts socially conscious investors.…”

Section: Consequences Of the Corporate Csrdmentioning

confidence: 99%

Review of the Impact of Corporate CSRD on the Capital Cost of Debt

Jun

2024

FBEM

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With the expansion of credit scale, green credit releases a large number of ecological dividends. CSR reporting is different from tightly regulated financial reporting and there are no uniform standard to regulate and monitor its disclosure. At the same time, because CSR reports mainly contain non-financial information of text, and text is more flexible and easier to manipulate than numbers, compared with financial reports, CSR reports have a large space for subjective manipulation, which runs counter to the original intention of reducing information asymmetry. Existing studies have confirmed that CSR intonation can provide incremental information to external information users, so it is worth further exploring whether creditors will obtain information from CSR reports when making credit decisions. Therefore, this paper tries to take CSR intonation as the entry point, summarize the motivation and consequences of CSRD, the relationship between social responsibility and debt capital cost, discuss the impact of CSRD behavior on the financing ability of enterprises, further improve the theoretical basis and conclusion of CSRD and enterprise financing ability, and promote the sustainable development of enterprises.

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“…Boubaker et al (2022) find evidence that markets of NATO countries exhibited higher returns. Other subjects studied in this literature include risk exposures (Abbassi et al, 2022;Qureshi et al, 2022), corporate decision making (Tosun and Eshraghi, 2022), volatility spillover (Li et al, 2022), implications of corporate social responsiblity (Basnet et al, 2022;Clancey-Shang and Fu, 2022;Deng et al, 2022;Kalhoro et al, 2022) and currency valuation (Chortane and Pandey, 2022). None of these studies focus on the heterogeneous reactions within the US market though, which is the arguably the most important stock market around the globe and relatively a safe haven in today's situation.…”

Section: Recent Crises and Financial Marketsmentioning

confidence: 99%

“…, 2022), implications of corporate social responsiblity (Basnet et al. , 2022; Clancey-Shang and Fu, 2022; Deng et al. , 2022; Kalhoro et al.…”

Section: Literature Reviewmentioning

confidence: 99%

The Russia–Ukraine conflict and foreign stocks on the US market

Clancey-Shang

2023

JRF

Self Cite

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PurposeThe authors investigate how market quality diverges between foreign firms and domestic firms on the US stock market in response to the Russia–Ukraine conflict.Design/methodology/approachWith an event study approach, the authors compare foreign firms with domestic firms in their market responses over the three-day window around the outbreak of the war. Further, with Difference-in-Difference (DID) analyses, the authors study the change in foreign firms' market quality upon this outbreak in comparison with their domestic counterparts. Finally, the authors compare the foreign firms across firm specific characteristics and home country characteristics.FindingsThe authors find that foreign stocks listed in the US experience more severe market quality deterioration compared to the stocks' domestic counterparts. This effect is especially strong for companies from countries considered friendlier towards Russia and companies that are not cross-listed. The authors' findings are consistent with the information asymmetry hypothesis concerning market quality. Moreover, US market investors have more concerns over political risks with non-US-aligned political standings during war times.Research limitations/implicationsThe authors' findings are consistent with the information asymmetry hypothesis concerning market quality. Moreover, US market investors have more concerns over political risks over non-US-aligned political standings during war time.Practical implicationsSince both countries in the conflict are in Europe, the US stock market, to a certain degree, becomes a safe haven for capital from Europe and other countries. In the meantime, American Depository Receipts (ADRs) have been important for US investors to create a globally diversified portfolio, and the knowledge regarding ADRs' vulnerability to international geopolitical events is valuable. The author' results are informative for stock market investors to understand the market dynamics for international and domestic companies during this extremely uncertain time.Originality/valueThis is the first study that examines the market quality divergence between foreign firms and domestic firms on the US stock market in response to the Russia–Ukraine conflict. The authors provide novel evidence on the change in ADRs' market quality associated with significant political uncertainty. The authors show that ADRs' market quality is more vulnerable to international geopolitical risks relative to otherwise comparable domestic firms.

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CSR Disclosure, Political Risk and Market Quality: Evidence from the Russia-Ukraine Conflict

Cited by 5 publications

References 35 publications

The Controversial Link between CSR and Financial Performance: The Mediating Role of Green Innovation

The Controversial Link between CSR and Financial Performance: The Mediating Role of Green Innovation

Review of the Impact of Corporate CSRD on the Capital Cost of Debt

The Russia–Ukraine conflict and foreign stocks on the US market

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