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Market Reaction to Corporate Social Responsibility Announcements: Evidence from China
Author(s) -
Zhang Liang,
Wang Tienan,
Fung HungGay
Publication year - 2014
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/j.1749-124x.2014.12063.x
Subject(s) - corporate social responsibility , china , newspaper , stakeholder , business , event study , capital market , social responsibility , accounting , chinese market , monetary economics , financial system , economics , finance , public relations , advertising , political science , management , law , biology , paleontology , context (archaeology)
Abstract This study uses an event study methodology to examine how the Chinese market reacts to announcements of involvement in corporate social responsibility (CSR) by Southern Weekend (a Chinese newspaper) for Chinese firms from 2008 to 2012. Our results show significant and positive market reactions, supporting the instrumental stakeholder theory. We attribute the positive market response to social capital development and real growth options related to the CSR involvement by the Chinese firms.