Market Reaction to Corporate Social Responsibility Liang Zhang, Tie-nan Wang, Hung-Gay Fung* 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. Key words: Chinese stock market, corporate social responsibility, cumulative abnormal returns
Announcements: Evidence from China
JEL codes: C51, G14, G15