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Does corporate philanthropic giving reduce analyst earnings dispersion? Evidence from Korea
Author(s) -
Chun HongMin
Publication year - 2019
Publication title -
corporate social responsibility and environmental management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.519
H-Index - 73
eISSN - 1535-3966
pISSN - 1535-3958
DOI - 10.1002/csr.1735
Subject(s) - earnings , dispersion (optics) , business , accounting , stock (firearms) , monetary economics , stock exchange , empirical evidence , economics , finance , mechanical engineering , philosophy , physics , epistemology , optics , engineering
This study investigates the relationship between corporate philanthropic giving and analyst earnings dispersion using Korean data from 2002 to 2015. Prior studies showed that philanthropic giving enhances financial performance and investment efficiency and reduces the risk that stock prices will crash. Despite the growing importance of corporate philanthropic giving, few studies examined how corporate giving affects analyst earnings dispersion. The empirical result suggests that, first, a higher level of corporate giving is significantly and negatively associated with analyst earnings dispersion. Second, the negative association between corporate giving and analyst earnings dispersion is more pronounced in nonchaebol firms. This study might be the first attempt to use qualified donation expense data in Korea to examine the direct association between corporate giving and analyst earnings dispersion.