Understanding the impact of corporate social responsibility on a firm’s stock price following a dividend cut announcement
Corporate Social Responsibility (CSR) has recently been the subject of several studies and in today’s world, CSR is an essential component in any large organisation. This study examines the effect of firms’ CSR activities on the returns of their stock following a dividend cut announcement. The analy...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Final Year Project (FYP) |
| Language: | English |
| Published: |
2013
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10356/51379 |
| _version_ | 1811693365103689728 |
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| author | Ho, Sherman Chua, Chia Jun Yang, Jonathan |
| author2 | Chanika Charoenwong |
| author_facet | Chanika Charoenwong Ho, Sherman Chua, Chia Jun Yang, Jonathan |
| author_sort | Ho, Sherman |
| collection | NTU |
| description | Corporate Social Responsibility (CSR) has recently been the subject of several studies and in today’s world, CSR is an essential component in any large organisation. This study examines the effect of firms’ CSR activities on the returns of their stock following a dividend cut announcement. The analysis is based on a 5-year dataset of companies listed on the KLD index who have announced a dividend cut over 5 years (2007-2011). We included 4 control variables: (1) beta, (2) firm size, (3) book to market value ratio, and (4) leverage. We found that a firm’s CSR activities do not have statistically significant influence on how the stock market reacts after a dividend cut announcement. Even after modifying the study to reduce the effect of external variables such as random market fluctuations and the timing of the dividend cut announcement, the results still show that CSR is irrelevant in the effect of a dividend cut announcement. Our study found that there is no evidence that suggests that firms engaging in CSR will see an improvement in financial performance, or in this case, as insurance against negative events. |
| first_indexed | 2024-10-01T06:50:31Z |
| format | Final Year Project (FYP) |
| id | ntu-10356/51379 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T06:50:31Z |
| publishDate | 2013 |
| record_format | dspace |
| spelling | ntu-10356/513792023-05-19T06:09:04Z Understanding the impact of corporate social responsibility on a firm’s stock price following a dividend cut announcement Ho, Sherman Chua, Chia Jun Yang, Jonathan Chanika Charoenwong Nanyang Business School DRNTU::Business Corporate Social Responsibility (CSR) has recently been the subject of several studies and in today’s world, CSR is an essential component in any large organisation. This study examines the effect of firms’ CSR activities on the returns of their stock following a dividend cut announcement. The analysis is based on a 5-year dataset of companies listed on the KLD index who have announced a dividend cut over 5 years (2007-2011). We included 4 control variables: (1) beta, (2) firm size, (3) book to market value ratio, and (4) leverage. We found that a firm’s CSR activities do not have statistically significant influence on how the stock market reacts after a dividend cut announcement. Even after modifying the study to reduce the effect of external variables such as random market fluctuations and the timing of the dividend cut announcement, the results still show that CSR is irrelevant in the effect of a dividend cut announcement. Our study found that there is no evidence that suggests that firms engaging in CSR will see an improvement in financial performance, or in this case, as insurance against negative events. BUSINESS 2013-04-02T04:39:56Z 2013-04-02T04:39:56Z 2013 2013 Final Year Project (FYP) http://hdl.handle.net/10356/51379 en Nanyang Technological University 50 p. application/pdf |
| spellingShingle | DRNTU::Business Ho, Sherman Chua, Chia Jun Yang, Jonathan Understanding the impact of corporate social responsibility on a firm’s stock price following a dividend cut announcement |
| title | Understanding the impact of corporate social responsibility on a firm’s stock price following a dividend cut announcement |
| title_full | Understanding the impact of corporate social responsibility on a firm’s stock price following a dividend cut announcement |
| title_fullStr | Understanding the impact of corporate social responsibility on a firm’s stock price following a dividend cut announcement |
| title_full_unstemmed | Understanding the impact of corporate social responsibility on a firm’s stock price following a dividend cut announcement |
| title_short | Understanding the impact of corporate social responsibility on a firm’s stock price following a dividend cut announcement |
| title_sort | understanding the impact of corporate social responsibility on a firm s stock price following a dividend cut announcement |
| topic | DRNTU::Business |
| url | http://hdl.handle.net/10356/51379 |
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