The real effects of stock prices: learning, disclosure and corporate social responsibility

Ji, Yucheng; Xu, Weiqing; Zhao, Qi

doi:10.1111/acfi.12494

Cited by 15 publications

(7 citation statements)

References 37 publications

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“…2019, Bova and Yang 2018, Ishibashi and Matsumura 2006, Ji et al. 2019, Kopel and Brand 2012, Matsumura 1998). This stream of literature focuses on the horizontal interactions among competitors.…”

Section: Related Literaturementioning

confidence: 98%

“…This study also relates to the literature in mixed markets such as mixed duopoly or mixed bilateral monopoly, where a purely for-profit firm competes or cooperates with a dual-purpose firm whose objective deviates from pure profit maximization. Prior literature on mixed duopoly suggests that the presence of such a dual-purpose firm changes the competitive dynamics and alters other critical decision-making such as R&D and information disclosure (e.g., Arya et al 2019, Bova and Yang 2018, Ishibashi and Matsumura 2006, Ji et al 2019, Kopel and Brand 2012, Matsumura 1998. This stream of literature focuses on the horizontal interactions among competitors.…”

Section: Related Literaturementioning

confidence: 99%

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Supplier Encroachment with a Dual‐Purpose Retailer

Wang

2021

Production and Operations Management

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The development of e‐commerce has greatly facilitated the practice that suppliers encroach upon the retail realm of downstream retailers through direct channels (e.g., online stores). The literature in this area has investigated profit‐maximizing firms, but the role of other organizational structures is not well understood. This study studies supplier encroachment in which the retailer is a dual‐purpose corporation that pursues his own profit as well as consumer surplus. We find that the retailer's pursuit of consumer surplus can not only intensify market competition and thus reducing the margin of direct selling, but also motivate the encroaching supplier to set a higher wholesale price compared with the case of no encroachment. The presence of a dual‐purpose retailer reduces the effectiveness of using the wholesale price as a lever by the supplier. Therefore, encroaching upon a dual‐purpose retailer can hurt the supplier. We examine whether a retailer can benefit from being a dual‐purpose corporation and how the retailer's dual objectives affect consumer surplus. Interestingly, a dual‐purpose retailer can earn a higher profit than a for‐profit retailer as the dual‐purpose structure helps deter encroachment (i.e., doing well by doing good). Also, consumer surplus in the case of a dual‐purpose retailer can be lower than that with a for‐profit retailer. This is because the commitment to be a dual‐purpose retailer reduces supplier encroachment and thus reduces the total quantity sold to consumers.

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Section: Related Literaturementioning

confidence: 98%

Section: Related Literaturementioning

confidence: 99%

Supplier Encroachment with a Dual‐Purpose Retailer

Wang

2021

Production and Operations Management

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“…Moreover, some studies find that during a crisis, the good reputation engendered by actively taking social responsibility has an isolation effect on external shocks that may cause financial losses to the company and can protect the company's stock price from the economic downturn (Schnietz & Epstein, 2005). Ji et al (2019) find that firms with higher levels of CSR disclose more precise information, which improves stock liquidity and price efficiency. Patten (2008) empirically studies the capital market's reaction to the philanthropic giving behavior of 79 US companies after the tsunami disaster in Southeast Asia in 2004 and finds that the 5‐day CAR of these companies were significantly positive, indicating that the companies' philanthropic giving during the disaster event received a positive reaction from the capital market.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Corporate philanthropic giving and nature of stock market reaction: Evidence from China

Zhu

Zhang

2021

Manage Decis Econ

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This study examines whether enterprises can obtain abnormal returns through philanthropic giving during public health emergencies, such as the COVID‐19 crisis, by using an event study approach to conduct an empirical analysis. The results show that if enterprises participate in philanthropic giving during the COVID‐19 crisis, they can obtain abnormal returns in the stock market. The extent of this market reaction is directly proportional to the level of philanthropic giving, and it is more significant for private enterprises, enterprises in regions that are more affected by the epidemic, enterprises in social responsibility sensitive industries, and enterprises with more timely donations.

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“…In a tractable model, Ji et al . () draw a theoretical conclusion that firms with higher CSR disclose more precise information, which leads to higher stock liquidity and better price efficiency.…”

Section: Introductionmentioning

confidence: 99%

The IPO corporate social responsibility information disclosure: Does the stock market care?

Huang

Xiang

Liu

et al. 2019

Accounting & Finance

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We create textual information indices using corporate social responsibility (CSR) information extracted from IPO prospectuses in China. We use the indices to measure the issuers' corporate social performance (CSP) and corporate environmental performance (CEP) and assess how the stock market reacts. We find that CSP disclosure is significantly related to the post-market performance of the firm. Specifically, better CSP disclosure is correlated with higher post-IPO listing holding period returns among firms that do not disclose donations or environmental expenditures, although the association does not hold for firms that make donations and environmental expenditures. In addition, institutional investors seem to care more about the CEP information for a firm than the CSP information.

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The real effects of stock prices: learning, disclosure and corporate social responsibility

Cited by 15 publications

References 37 publications

Supplier Encroachment with a Dual‐Purpose Retailer

Supplier Encroachment with a Dual‐Purpose Retailer

Corporate philanthropic giving and nature of stock market reaction: Evidence from China

The IPO corporate social responsibility information disclosure: Does the stock market care?

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