Stock Market and Corporate Social Responsibility: A Long-Run Analysis of the Major Industrial Crises

43 Pages Posted: 5 Nov 2012

See all articles by Cécile Carpentier

Cécile Carpentier

Laval University; Center for Interuniversity Research and Analysis on Organization (CIRANO); University of Lille II - European Center for Corporate Control Studies

Jean-Marc Suret

Laval University; Center for Interuniversity Research and Analysis on Organization (CIRANO); European Center for Corporate Control Studies

Date Written: January 25, 2012

Abstract

The aim of this paper is to determine the extent to which major industrial crises have a long-run effect on shareholder wealth. We add to the previous evidence that such crises can have a short-term negative impact on stock prices. The long-term effect is important because institutional investors, which own the majority of shares, generally have long investment horizons. Accordingly, they will be mainly concerned by corporate social responsibility (CSR) if it can be linked to a persistent effect on stock prices. We analyze the main industrial crises over half a century, a period of time that allows us to determine if the emergence of CSR consciousness has increased investors’ sensitivity to crises. We find that crises have a long-run impact on shareholders’ wealth, particularly in sectors where consumers can easily switch to competing companies, and when the crises are followed by government intervention.

Suggested Citation

Carpentier, Cécile and Suret, Jean-Marc, Stock Market and Corporate Social Responsibility: A Long-Run Analysis of the Major Industrial Crises (January 25, 2012). 29th International Conference of the French Finance Association (AFFI) 2012. Available at SSRN: https://ssrn.com/abstract=2084908 or http://dx.doi.org/10.2139/ssrn.2084908

Cécile Carpentier (Contact Author)

Laval University ( email )

Pavilion Palasis Prince
Quebec, Quebec G1V 0A6
Canada

Center for Interuniversity Research and Analysis on Organization (CIRANO) ( email )

2020 rue University, 25th floor
Montreal, Quebec H3C 3J7
Canada

University of Lille II - European Center for Corporate Control Studies ( email )

2 rue de Mulhouse
BP381
Lille, 59800
France

Jean-Marc Suret

Laval University ( email )

Accounting School
Quebec, P.Q. G1K 7P4
Canada
418-656-7134 (Phone)
418-656-7746 (Fax)

Center for Interuniversity Research and Analysis on Organization (CIRANO) ( email )

1130 rue Sherbrooke Ouest
Bureau 1400
Montreal, Quebec H3A 2M8
Canada

European Center for Corporate Control Studies ( email )

2 rue de Mulhouse
BP381
Lille, 59800
France

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