Brammer, Stephen, Brooks, Chris and Pavelin, Stephen (2009) The stock performance of America's 100 Best Corporate Citizens. Quarterly Review of Economics & Finance, Vol.49 (No.3). 1065 - 1080. doi:10.1016/j.qref.2009.04.001

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Abstract

We consider the stock performance of America's 100 Best Corporate Citizens following the annual survey by Business Ethics. We examine both possible short-term announcement effects around the time of the survey's publication, and whether longer-term returns are higher for firms that are listed as good citizens. We find some evidence of a positive market reaction to a firm's presence in the Top 100 firms that are made public, and that holders of the stock of such firms earn small abnormal returns during an announcement window. Over the year following the announcement, companies in the Top 100 yield negative abnormal returns of around 3%. However, such companies tend to be large and with stocks exhibiting a growth style, which existing studies suggest will tend to perform poorly. Once we allow for these firm characteristics, the poor performance of the highly rated firms declines. We also find companies that are newly listed as good citizens and companies in the Top 100 but outside the S&P 500 can provide considerable positive abnormal returns to investors, even after allowing for their market capitalization, price-to-book ratios, and sectoral classification.

Item Type:	Journal Article
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management H Social Sciences > HF Commerce H Social Sciences > HG Finance
Divisions:	Faculty of Social Sciences > Warwick Business School
Library of Congress Subject Headings (LCSH):	Stocks -- Prices -- United States, Business ethics, Social responsibility of business
Journal or Publication Title:	Quarterly Review of Economics & Finance
Publisher:	Elsevier BV
ISSN:	1062-9769
Official Date:	August 2009
Dates:	Date Event August 2009 Published
Volume:	Vol.49
Number:	No.3
Page Range:	1065 - 1080
DOI:	10.1016/j.qref.2009.04.001
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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