Employee welfare and stock price crash risk

Ben‐Nasr, Hamdi; Ghouma, Hatem

doi:10.1016/j.jcorpfin.2017.12.007

Cited by 149 publications

(57 citation statements)

References 79 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Based on our results, companies with a higher level of commitment to their employees' welfare and a higher level of involvement in their local communities and society in general also tend to have a higher level of environmental practice. Our results are in accordance with those of Ben Nasr and Ghouma [56], Rae and coauthors [53], and To and coauthors [54]. However, our results failed to provide evidence that business-related CSR practices, customer relations, and business transparency influence environmental practice.…”

Section: Discussionsupporting

confidence: 87%

See 1 more Smart Citation

The Factors Affecting the Environmental Practices of Companies: The Case of Serbia

2019

View full text Add to dashboard Cite

Environmental practices are often considered external to the business, and the impacts of self-regulation and other CSR company practices on environmental practices are important but not fully understood-especially in transitional and developing countries. The aim of this paper is to explore factors that influence the environmental practices of companies operating in Serbia. We observed four types of self-regulations (core values, codes of conduct, ISO 9001, and ISO 14001); the level of CSR practices in relationships with employees, customers, the local community, and society, and related to business transparency; as well as company features related to types of operations (manufacturing vs. service), size, and internationalization (multinational ownership and export activities). Based on the SEM analysis of data collected from 178 companies operating in Serbia, the findings showed that smaller, manufacturing companies that applied the observed types of self-regulations, which have a higher level of employee relations and are more social and community involved, are more likely to have higher levels of environmental practice. Among the observed self-regulation types, only ISO 14001 certification proved to have an individual effect on company environmental practices. However, our results also showed that the influence of core values, applied codes of conduct, and ISO 9001 certification cannot be neglected.Sustainability 2019, 11, 5960 2 of 17 the decoupling phenomenon, the discrepancy between policies and practice, or the formal adoption of self-regulation by a company that does not become incorporated into the day-to-day routine [16] has its roots in the company's intention to communicate more than achieve [11]. The public disclosure of self-regulations related to environmental activities in order to present a proactive environmental image by providing greenwashing [3] raises concerns related to the effectiveness of such self-regulations.

show abstract

Section: Discussionsupporting

confidence: 87%

“…According to Adams [55], the top environmentally friendly companies take good care of employees' welfare. Finally, the best places to work "are known for their fair labor practices, sound environmental practices, and satisfied employees" [56].…”

Section: The Impact Of Csr Activities On Environmental Practicesmentioning

confidence: 99%

The Factors Affecting the Environmental Practices of Companies: The Case of Serbia

2019

View full text Add to dashboard Cite

show abstract

“…There are at least two strong arguments for why individualism should affect crash risk. The first argument is based on a burgeoning stream of the literature that attributes the source of crash risk to the bad‐news hoarding behavior of managers (e.g., Andreou, Louca, & Petrou, ; Ben‐Nasr & Ghouma, ; DeFond, Mingyi, Siqi, & Yinghua, ; Jin & Myers, ; Kim, Li, & Zhang, ; Xu, Li, Yuan, & Chan, ). Driven by incentives such as career concerns or compensation contracts, managers tend to withhold bad news (Kothari, Shu, & Wysocki, ), but when bad news is accumulated beyond some triggering threshold, it will be revealed all at once, causing stock price crashes (Jin & Myers, ).…”

Section: Introductionmentioning

confidence: 99%

Individualistic cultures and crash risk

Dang

Faff

Luong³

et al. 2018

Euro Fin Management

View full text Add to dashboard Cite

This study examines whether individualistic national culture is associated with stock price crash risk ('crash risk') for a sample of firms from 36 countries over the period of 1990-2015. We find robust evidence that firms in more individualistic cultural settings exhibit higher future crash risk. Digging deeper, we find that earnings management, excessive managerial risk-taking, and investors' difference of opinion and overconfidence are all possible explanations for the positive effect of individualism on crash risk.Overall, our findings suggest that individualism, as a key cultural dimension, has an important impact on investor welfare, manifested through crash risk. K E Y W O R D S earnings management, excessive managerial risk-taking, individualism, national culture, stock price crash risk J E L C L A S S I F I C A T I O N G12, G15

show abstract

“…STATS ratings are widely used in previous studies to construct indexes of employee well‐being or satisfaction. See, e.g., Turban and Greening (), Landier, Nair, and Wulf (2009), Verwijmeren and Derwall (), Bae, Kang, and Wang (2011), Ghaly, Dang, and Stathopoulos (2015), Guo, Huang, Zhang, and Zhou (2016), and Ben‐Nasr and Ghouma (). We find that yield spreads are negatively related to NSAT and SAT , and positively related to DISAT when controlling for a number of bond and firm characteristics, and firm‐ and year‐fixed effects.…”

Section: Introductionmentioning

confidence: 99%

“…We further show several cases in which an improvement in employee satisfaction may not be consistent with bondholders' interests. In particular, we find that the spread-reduction effect of SAT becomes weaker: (i) in financially constrained firms, in which the employee-related expenses are likely to constrain a firm's investment in profitable projects, and thus weaken the borrower's ability to repay their debt (e.g., Campbell, Dhaliwal, & Schwartz, 2011;Rauh, 2006); and (ii) in firms with weaker governance structures, in which entrenched managers or blockholders are more likely to pursue better employee relations to secure private benefits at the expense of other providers of capital (Agrawal, 2011;Ben-Nasr & Ghouma, 2018;Cronqvist, Heyman, Nilsson, Svaleryd, & Vlachos, 2009;Masulis & Reza, 2015).…”

mentioning

confidence: 99%

Employee treatment and its implications for bondholders

Chen

Yang

2018

Euro Fin Management

View full text Add to dashboard Cite

We examine the various channels through which the quality of a firm's employee relations can affect the welfare of bondholders. Our evidence suggests that better employee treatment benefits bondholders and leads to a lower bond spread by enhancing a firm's productivity, and by reducing the likelihood of product failures, labor strife, and employee turnover. However, a higher level of satisfaction is costlier for bondholders in firms facing more severe financial constraints or agency problems.

show abstract

Employee welfare and stock price crash risk

Cited by 149 publications

References 79 publications

The Factors Affecting the Environmental Practices of Companies: The Case of Serbia

The Factors Affecting the Environmental Practices of Companies: The Case of Serbia

Individualistic cultures and crash risk

Employee treatment and its implications for bondholders

Contact Info

Product

Resources

About