Corporate Social Responsibility and Demand for New Equity Issues

42 Pages Posted: 6 Oct 2014 Last revised: 1 Aug 2016

See all articles by Beng Soon Chong

Beng Soon Chong

Nanyang Technological University (NTU) - Nanyang Business School

Zhenbin Liu

Hong Kong Baptist University

Date Written: July 1, 2016

Abstract

Consistent with the hypothesis that equity demand is negatively (positively) affected by CSR concerns (strengths) of the issuer, we find that (1) issuers with greater CSR concerns are more likely to revise downwards the terms (offer price, number of shares offered, and total proceeds raised) of their stock offerings; (2) the probability of the over-allotment option being exercised is negatively related to CSR concerns in SEO issues, but is positively related to CSR strengths in IPO issues; and (3) the change in the percentage of institutional holdings around the issue date is positively (negatively) related to CSR strengths (concerns).

Keywords: Initial Public Offerings; Seasoned Equity Offerings; Equity Demand; Price Revisions; Over-allotment Option; Corporate Social Responsibility (CSR); Environmental, Social and Governance (ESG)

JEL Classification: G14; G32; L2; M14

Suggested Citation

Chong, Beng Soon and Liu, Zhenbin, Corporate Social Responsibility and Demand for New Equity Issues (July 1, 2016). Available at SSRN: https://ssrn.com/abstract=2505779 or http://dx.doi.org/10.2139/ssrn.2505779

Beng Soon Chong (Contact Author)

Nanyang Technological University (NTU) - Nanyang Business School ( email )

Singapore, 639798
Singapore

Zhenbin Liu

Hong Kong Baptist University ( email )

Kowloon Tong, Kowloon
Hong Kong

HOME PAGE: http://aclw.hkbu.edu.hk/eng/faculty/admin-details.jsp?id=zbliuHKB&cv=00069&cid=306&cp=1

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