Did the Creation of ISE Created Value to Companies?

12 Pages Posted: 27 Sep 2008

See all articles by Felipe Bogéa

Felipe Bogéa

McKinsey Consulting Group

Anderson L. S. Campos

Universidade Metodista de São Paulo; Universidade Presbiteriana Mackenzie

David Camino Blasco

Universidad Carlos III de Madrid - Department of Business Administration

Date Written: September 15, 2008

Abstract

The present research conducted an event study to evaluate the effect of Corporate Social Responsibility (CSR) on share price, following approach work of Curran and Moran's (2007). The share price of a company was used as a measure of the companies' financial performance. The announcement of the constituents of the indice de Sustentabilidade Empresarial (ISE) was defined as the proxy for CSR. None of the abnormal returns and Cumulative Abnormal Returns were statistically significant from zero, although the mean abnormal return for day 0 was positive. This work did not find evidence of positive abnormal returns following the announcements of companies being included in ISE. On the other hand, there was also no evidence of negative abnormal returns. The lack of significant results have been found in previous distinct work for international indexes and also for the Brazilian index and it does not necessarily mean absence of relation between good social practices and creation of value. There are some possible explanations for the lack of relation. Among the possible explanations, the low power of t-test is a possibility that was found in this paper, but that has not been acknowledged in other works.

Keywords: Corporate Social Responsability

JEL Classification: G34

Suggested Citation

Bogéa, Felipe and Campos, Anderson L. S. and Camino Blasco, David, Did the Creation of ISE Created Value to Companies? (September 15, 2008). Available at SSRN: https://ssrn.com/abstract=1274270 or http://dx.doi.org/10.2139/ssrn.1274270

Felipe Bogéa

McKinsey Consulting Group ( email )

Washington, DC
United States

Anderson L. S. Campos (Contact Author)

Universidade Metodista de São Paulo ( email )

R. do Sacramento 230
Rudge Ramos
São Bernardo do Campo, São Paulo 09640-000
Brazil

Universidade Presbiteriana Mackenzie ( email )

Rua da Consolação 920
São Paulo, 010302907
Brazil

David Camino Blasco

Universidad Carlos III de Madrid - Department of Business Administration ( email )

Calle Madrid 126
Getafe, Madrid, Madrid 28903
Spain
34-91-6249607/08 (Phone)
34-91-6249628/9833 (Fax)

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