دانلود رایگان مقاله انگلیسی مسئولیت اجتماعی شرکت ها و ارائه سهام فصلی - الزویر 2018

Abstract

We examine whether corporate social responsibility (CSR) creates value for seasoned equity issuers. Using a sample of seasoned equity offerings (SEOs) by U.S. companies between 2004 and 2013, we find a positive association between CSR performance and the stock price reaction to SEO announcements. Surprisingly, however, further tests reveal that seasoned equity issuers with high CSR scores tend to have higher post-SEO increases in cash holdings, and lower investments in real assets, than issuers with low CSR scores. Moreover, high-CSR issuers have worse post-SEO operating and stock price performance than low-CSR issuers. Together, our findings suggest that high CSR scores mislead shareholders into attributing value-increasing motives to seasoned equity issues.

Conclusion and discussion

This paper examines the impact of a firm’s CSR performance on its SEO performance. To develop a hypothesis for the impact of CSR performance on SEO announcement returns, we combine theoretical and empirical insights on the stock price reaction to SEOs with theory on the shareholder value effect of CSR activities. As such, we predict that CSR performance can influence stock price reactions to SEO announcements by affecting firms’ equity-related agency or adverse selection costs. We present three main pieces of empirical evidence. First, firms with higher CSR scores experience more favorable stock price reactions around SEO announcements, even when we control for a wide range of other potential SEO announcement return determinants. Second, high-CSR issuers tend to increase cash holdings following their SEOs, while low-CSR issuers are more likely to invest SEO proceeds in real assets. Third, high-CSR issuers have worse long-term operating and stock price performance than low-CSR issuers. Together, our findings suggest that the market is misguided in placing a positive value on high CSR performance for seasoned equity issuers, as high CSR performance does not translate into more value-creating SEOs. We do not find evidence that firms deliberately increase their CSR performance before an SEO, which is consistent with the fact that most SEOs are planned and executed over a short time frame (Autore and Gehy, 2013). Our results continue to hold in a two-step Heckman procedure that controls for self-selection bias. Our findings on the role of CSR performance for seasoned equity issuers differ strongly from those of Deng et al. (2013). Their results suggest that investors correctly use CSR as an indicator of merger quality in their reaction to Mergers and Acquisition (M&A) announcements, and that high-CSR bidders effectively have better operating performance following their deals. One reason for the difference between their results and our more pessimistic findings on the role of CSR is the following. According to the stakeholder value maximization view, CSR performance results in lower contracting costs for interactions between firms and their various stakeholders. The reason is that CSR activities, and the trust they generate, enable the firm to rely more strongly on implicit contracts with stakeholders, which tend to be cheaper than explicit contracts (Jensen and Meckling, 1976; Cornell and Shapiro, 1987; Hill and Jones, 1992). These more efficient stakeholder interactions are likely to be of much greater operational advantage in the context of M&As than in the context of SEOs.