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  1. Mitigating Investor Reactions to Financial Misconduct: The Moderating Roles of Firm Commitment Cues.Lu Ye & Helen Wei Hu - forthcoming - Journal of Business Ethics:1-20.
    Corporate financial misconduct has garnered increased interest in business ethics research. Although prior research has provided insights into the consequences of financial misconduct, our understanding of why investors react differently to similar instances of misconduct, especially in emerging markets, remains limited. In this study, we first argue that direct information on the severity of misconduct is the primary basis for investors’ evaluations. Next, drawing on screening theory, we theorize that in contexts characterized by high information asymmetry, indirect information about existing (...)
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  • Returnee Executives, Corporate Social Responsibility, and Stock Price Synchronicity.Yuan di GaoZhao & Qinghua Tian - 2022 - Frontiers in Psychology 13.
    Executive characteristics have a significant impact on corporate decision-making, corporate sustainable behavior, and stock market performance, which may influence the corporations’ sustainable development in the long run. The role of returnee talents in the corporate sustainable development has received extensive academic attention. Using data of Chinese A-share listed companies over the period of 2008–2018, we find that there is a negative relationship between executives’ foreign experience and stock price synchronicity. We also prove that corporate social responsibility has a significant mediating (...)
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  • Sustainable Development and Corporate Performance: A Study Based on the Dow Jones Sustainability Index.M. Victoria López, Arminda Garcia & Lazaro Rodriguez - 2007 - Journal of Business Ethics 75 (3):285-300.
    The goal of this paper is to examine whether business performance is affected by the adoption of practices included under the term Corporate Social Responsibility (CSR). To achieve this goal, we analyse the relation between CSR and certain accounting indicators and examine whether there exist significant differences in performance indicators between European firms that have adopted CSR and others that have not. The effects of compliance with the requirements of CSR were determined on the basis of firms included in the (...)
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  • Does Venture Capital Backing Improve Disclosure Controls and Procedures? Evidence from Management’s Post-IPO Disclosures.Douglas Cumming, Lars Helge Hass, Linda A. Myers & Monika Tarsalewska - 2022 - Journal of Business Ethics 187 (3):539-563.
    Firm managers make ethical decisions regarding the form and quality of disclosure. Disclosure can have long-term implications for performance, earnings manipulation, and even fraud. We investigate the impact of venture capital (VC) backing on the quality and informativeness of disclosure controls and procedures for newly public companies. We find that these controls and procedures are stronger, as evidenced by fewer material weaknesses in internal control under Section 302 of the Sarbanes–Oxley Act, when companies are VC-backed. Moreover, these disclosures are informative (...)
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  • The Pragmatic and Ethical Barriers to Corporate Social Responsibility Disclosure: The Nike Case.Kristen Bell DeTienne & Lee W. Lewis - 2005 - Journal of Business Ethics 60 (4):359-376.
    Numerous studies have documented the demand for information regarding corporations’ relationships to society. Much recent research has demonstrated why stakeholders need this information, and how it benefits both companies and the public. These studies suggest numerous methods by which companies can effectively disclose corporate social responsibility (CSR) information to the public, but in practice, reporting this type of information is fraught with legal and ethical uncertainty often unexplored in most literature. This article represents a fresh analysis of the numerous pragmatic (...)
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  • (1 other version)Analyst coverage, corporate social responsibility, and firm risk.Hoje Jo & Maretno Harjoto - 2014 - Business Ethics: A European Review 23 (3):272-292.
    This article examines the empirical association between analyst coverage and corporate social responsibility (CSR) by investigating their simultaneous and causal effects, and its joint effects of CSR engagement and analyst coverage on firm risk. We find a positive association between the level and change of CSR engagement and the level and change of analyst coverage after considering simultaneity and causality. Based on the first-difference approach, we further find that the change in analyst following from the previous year affects the change (...)
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  • Legal vs. Normative CSR: Differential Impact on Analyst Dispersion, Stock Return Volatility, Cost of Capital, and Firm Value.Maretno A. Harjoto & Hoje Jo - 2015 - Journal of Business Ethics 128 (1):1-20.
    This study examines how the sell-side analysts interpret firms’ corporate social responsibility activities. Specifically, we examine the differential impact of overall, legal, and normative CSR on the analysts’ earnings forecast dispersion, stock return volatility, cost of equity capital, and firm value. Employing a sample of U.S. public firms during 1993–2009, we find that overall CSR intensities reduce analyst dispersion of earnings forecast, volatility of stock return and cost of capital , and increase firm value. However, its impact is reduced for (...)
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  • Corporate Governance, Commitment to Business Ethics, and Firm Valuation: Evidence from the Korean Stock Market. [REVIEW]Jinhan Pae & Tae Hee Choi - 2011 - Journal of Business Ethics 100 (2):323 - 348.
    A variety of stakeholders have long been interested in the factors that are related to firm valuation. This article investigates why companies with more comprehensive corporate governance (CG) have a value premium over companies with less comprehensive CG. We posit and find that the cost of equity capital (COC) decreases with the strength of CG, suggesting that the value premium stems from the lower COC for more comprehensive CG. We also find that the COC is lower for companies with strong (...)
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  • Corporate Social Responsibility, Investor Protection, and Earnings Management: Some International Evidence. [REVIEW]Hsiang-Lin Chih, Chung-Hua Shen & Feng-Ching Kang - 2008 - Journal of Business Ethics 79 (1-2):179 - 198.
    To many, recent allegations of accounting fraud (or earnings management; EM) at Enron, coupled with similar ones at many other corporations, are a strong indication of a serious decay in business ethics. In academics, this raises the concern between EM and corporate social responsibility (CSR). Since it has neither been documented, nor globally tested whether CSR mitigates or increases the extent of EM, three kinds of EM are studied: earnings smoothing, earnings aggressiveness, and earnings losses and decreases avoidance. The extents (...)
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  • Character Cues and Contracting Costs: The Relationship Between Philanthropy and the Cost of Capital.Leon Zolotoy, Don O’Sullivan & Jill Klein - 2019 - Journal of Business Ethics 154 (2):497-515.
    Prior studies in business ethics highlight the role of philanthropy in shaping stakeholders’ perceptions of a firm’s underlying moral tendencies and values. Scholars argue that philanthropy-based character inferences influence whether and how stakeholders engage with firms. We extend this line of reasoning to examine the impact of philanthropy on firms’ contracting costs in the capital market. We posit that philanthropy-based character inferences reduce investors’ agency concerns, thereby reducing firms’ cost of capital. We also posit that the strength of the philanthropy–cost (...)
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  • On the Value of Corporate Social Responsibility Disclosure: An Empirical Investigation of Corporate Bond Issues in China.Guangming Gong, Si Xu & Xun Gong - 2018 - Journal of Business Ethics 150 (1):227-258.
    We provide the first comprehensive and robust evidence on the relationship between CSR disclosure quality and the costs of corporate bonds in China. We find that firms with high CSR disclosure quality are associated with lower costs of corporate bonds. Our findings are robust to endogeneity issues arising from reverse causality, omitted variable bias, and the interdependencies between price and non-price terms. The negative relationship between CSR disclosure quality and the costs of corporate bonds is stronger in weak corporate governance (...)
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  • Ethics and Disclosure: A Study of the Financial Performance of Firms in the Seasoned Equity Offerings Market.Hoje Jo & Yongtae Kim - 2008 - Journal of Business Ethics 80 (4):855-878.
    In this article, we examine the association between ethics and disclosure and the impact of this association on the long-term, post-issue performance of seasoned equity offerings (SEOs). We argue that firms with extensive disclosure are less likely to face information problems, and more likely to lead to an active shareholder monitoring, and therefore, engage in fewer unethical activities, such as aggressive earnings manipulation, and have better long-term, post-issue performance. Consistent with these predictions, this study presents evidence that disclosure is negatively (...)
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  • Sustainability Practices and Corporate Financial Performance: A Study Based on the Top Global Corporations. [REVIEW]Rashid Ameer & Radiah Othman - 2012 - Journal of Business Ethics 108 (1):61-79.
    Sustainability is concerned with the impact of present actions on the ecosystems, societies, and environments of the future. Such concerns should be reflected in the strategic planning of sustainable corporations. Strategic intentions of this nature are operationalized through the adoption of a long-term focus and a more inclusive set of responsibilities focusing on ethical practices, employees, environment, and customers. A central hypothesis, that we test in this paper is that companies which attend to this set of responsibilities under the term (...)
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  • Corporate Social Responsibility and Management Forecast Accuracy.Dongyoung Lee - 2017 - Journal of Business Ethics 140 (2):353-367.
    This study examines the association between corporate social responsibility and management forecast accuracy. Using data from 1995 to 2009, we find that firms provide more accurate earnings forecasts in the face of CSR activities. We also find that the positive association between CSR and management forecast accuracy is only present for the post-regulation period of 2001–2009, after the introduction of disclosure regulations intended to mitigate managers’ opportunistic behavior. These findings are consistent with the notion that managers strive to improve the (...)
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  • Value-Enhancing Capabilities of CSR: A Brief Review of Contemporary Literature.Mahfuja Malik - 2015 - Journal of Business Ethics 127 (2):419-438.
    This study reviews and synthesizes the contemporary business literature that focuses on the role of corporate social responsibility to enhance firm value. The main objective of this review is to proffer a precise understanding of what has already been investigated and the findings of those investigations regarding the value-enhancing capabilities of CSR for public firms. In addition, this review identifies gaps in the existing literature, evaluates inconsistent findings, discusses possible data sources for empirical researchers, and provides direction for exploring other (...)
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  • Data Envelopment Analysis and Social Enterprises: Analysing Performance, Strategic Orientation and Mission Drift.Matthias Staessens, Pieter Jan Kerstens, Johan Bruneel & Laurens Cherchye - 2019 - Journal of Business Ethics 159 (2):325-341.
    This study endorses the use of data envelopment analysis, which uses benefit-of-the-doubt weighting to evaluate the social, economic and overall performance of social enterprises. This methodology is especially useful for creating composite indicators based on multiple outputs expressed in different measurement units, and allows for enterprise-specific weighting of the different objectives. Applying this methodology on a unique longitudinal dataset of Flemish sheltered workshops suggests that social enterprises may face different types of mission drift. Further, our results show that top-performing social (...)
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  • (1 other version)Firm performance, corporate ownership, and corporate social responsibility disclosure in China.Qi Li, Wei Luo, Yaping Wang & Liansheng Wu - 2013 - Business Ethics, the Environment and Responsibility 22 (1):159-173.
    The existing literature provides conflicting results on the association between firm performance and corporate social responsibility (CSR) disclosure. This paper empirically examines the effect of firm performance on CSR disclosure in terms of disclosure frequency and quality among Chinese listed firms and the possible mediating effect of corporate ownership on the relationship between firm performance and CSR disclosure. Our findings show that better-performing firms are more likely than worse-performing ones to disclose CSR information and to produce higher quality CSR reports. (...)
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  • (1 other version)Labored Relations: Corporate Citizenship, Labor Unions, and Freedom of Association.Cedric E. Dawkins - 2012 - Business Ethics Quarterly 22 (3):473-500.
    ABSTRACT:Globalization has brought increased attention to the notion that labor rights such asfreedom of association—the right of workers to organize a union—are fundamental human rights. However, the vigorous opposition to freedom of association by US firms is largely ignored in the business ethics literature and exacerbated by compensatory corporate citizenship rating mechanisms that tend to mask labor rights deficiencies. I argue that because freedom of association is a hypernorm, instrumental to fully realizing basic human rights, labor rights and human rights (...)
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  • When Ethics are Compromised by Ideology: The Global Competitiveness Report. [REVIEW]Harald Bergsteiner & Gayle C. Avery - 2012 - Journal of Business Ethics 109 (4):391-410.
    The Global Competitiveness Report raises ethical issues on multiple levels. The traditional high ranking accorded the US is largely attributable to fallacies, poor science and ideology. The ideological bias finds expression in two ways: the inclusion of indices that do not provide competitive advantage, but that fit the Anglo/US ideology; and the exclusion of indices that are known to offer competitive advantage, but that do not fit the Anglo/US ideology. This flaw is compounded by methodological problems that raise further doubt (...)
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  • Board Diversity and Corporate Social Disclosure: Evidence from Vietnam.Trang Cam Hoang, Indra Abeysekera & Shiguang Ma - 2018 - Journal of Business Ethics 151 (3):833-852.
    Debates around sound corporate governance propose board diversity as a key attribute to sufficiently challenge executive management for stakeholder engagement. This study contributes to this debate by empirically investigating the effect of board diversity on corporate social disclosure of Vietnamese listed firms. The study finds a significantly positive effect of diversity-in-boards on CSD while diversity-of-boards has no effect on CSD. The results contribute by showing that a single theoretical approach can provide an adequate explanation for board diversity. The study contributes (...)
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  • Investing in Socially Responsible Companies is a must for Public Pension Funds? Because there is no Better Alternative.S. Prakash Sethi - 2005 - Journal of Business Ethics 56 (2):99-129.
    With assets of over US$1.0 trillion and growing, public pension funds in the United States have become a major force in the private sector through their holding of equity positions in large publicly traded corporations. More recently, these funds have been expanding their investment strategy by considering a corporation's long-term risks on issues such as environmental protection, sustainability, and good corporate citizenship, and how these factors impact a company's long-term performance. Conventional wisdom argues that the fiduciary responsibility of the pension (...)
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  • Relative Performance Goals and Management Earnings Guidance.Yanrong Jia, Ananth Seetharaman, Yan Sun & Xu Wang - 2023 - Journal of Business Ethics 183 (4):1045-1071.
    We examine managers’ earnings forecasts for evidence of incentive alignment or subversion characteristics. We find that forecasts by managers compensated via relative performance (RP) goals are more likely to be pessimistic and less accurate than those by managers compensated via absolute performance (AP) goals. For firms not issuing earnings forecasts, disclosures in Form 10-Ks are more pessimistic for RP firms than for AP firms. Furthermore, we find that RP firms perform worse than AP firms in terms of future stock returns. (...)
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  • The future in reports: Prediction, commitment and legitimization in corporate social responsibility.Marina Bondi - 2016 - Pragmatics and Society 7 (1):57-81.
    Company disclosures are often looked at as narrative rather than argumentative or directive texts. And yet “irrealis” statements – references to future or hypothetical processes – do play a role and contribute greatly to the construction of corporate identity. Combining a corpus and a discourse perspective, the paper looks at references to the future in a corpus of CSR reports. After a preliminary analysis of frequency data, a case study of markers of futurity is presented, focusing on ways of expressing (...)
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  • Ethical Commitment, Financial Performance, and Valuation: An Empirical Investigation of Korean Companies.Tae Hee Choi & Jinchul Jung - 2008 - Journal of Business Ethics 81 (2):447-463.
    A variety of stakeholders including investors, corporate managers, customers, suppliers, employees, researchers, and government policy makers have long been interested in the relationship between the financial performance of a corporation and its commitment to business ethics. As a subject of research, the relations between business ethics and corporate valuation has yet to be thoroughly quantified and investigated. This article is an effort to amend this inadequacy by demonstrating a statistically significant association between ethical commitment and corporate valuation measures. Consistent with (...)
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  • (1 other version)Firm performance, corporate ownership, and corporate social responsibility disclosure in China.Qi Li, Wei Luo, Yaping Wang & Liansheng Wu - 2013 - Business Ethics: A European Review 22 (2):159-173.
    The existing literature provides conflicting results on the association between firm performance and corporate social responsibility (CSR) disclosure. This paper empirically examines the effect of firm performance on CSR disclosure in terms of disclosure frequency and quality among Chinese listed firms and the possible mediating effect of corporate ownership on the relationship between firm performance and CSR disclosure. Our findings show that better‐performing firms are more likely than worse‐performing ones to disclose CSR information and to produce higher quality CSR reports. (...)
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  • Corporate Philanthropy, Ownership Type, and Financial Transparency.Cuili Qian, Xinzi Gao & Albert Tsang - 2015 - Journal of Business Ethics 130 (4):851-867.
    Drawing on stakeholder theory and the concept of enlightened self-interest, we argue that firms that actively engage in corporate philanthropic giving also tend to demonstrate greater concern for investors’ interests by providing more transparent financial information and avoiding corporate misconduct. Moreover, the relationships between corporate giving, financial information transparency, and corporate misconduct vary significantly according to the firm’s ownership type, which affects the fundamental motivations for corporate philanthropy. In a sample of Chinese publicly listed firms from the 2003–2009 period, we (...)
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  • Market Reactions to Increased Reliability of Sustainability Information.Julia Lackmann, Jürgen Ernstberger & Michael Stich - 2012 - Journal of Business Ethics 107 (2):111-128.
    This article investigates whether investors consider the reliability of companies’ sustainability information when determining the companies’ market value. Specifically, we examine market reactions (in terms of abnormal returns) to events that increase the reliability of companies’ sustainability information but do not provide markets with additional sustainability information. Controlling for competing effects, we regard companies’ additions to an internationally important sustainability index as such events and consider possible determinants for market reactions. Our results suggest that first, investors take into account the (...)
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  • The Association between Disclosure, Distress, and Failure.Lori Holder-Webb & Jaffrey R. Cohen - 2007 - Journal of Business Ethics 75 (3):301-314.
    The quality of corporate disclosures has drawn increasing levels of criticism from Congress and the SEC. A subject of particularly intense scrutiny and action is the Management’s Discussion and Analysis (MD&A). This narrative, intended to provide an inside perspective on the reported results of the firm, is particularly important when attempting to evaluate the investment prospects of the marginal or poorly performing firm. However, managers may restrict the information content of the disclosure, raising potential concerns about ethical behavior. In this (...)
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  • (1 other version)Labored Relations: Corporate Citizenship, Labor Unions, and Freedom of Association.Cedric E. Dawkins - 2012 - Business Ethics Quarterly 22 (3):473-500.
    ABSTRACT:Globalization has brought increased attention to the notion that labor rights such asfreedom of association—the right of workers to organize a union—are fundamental human rights. However, the vigorous opposition to freedom of association by US firms is largely ignored in the business ethics literature and exacerbated by compensatory corporate citizenship rating mechanisms that tend to mask labor rights deficiencies. I argue that because freedom of association is a hypernorm, instrumental to fully realizing basic human rights, labor rights and human rights (...)
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