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Abstract
We assess whether social capital, captured by CSR, is an effective hedge against risks arising from political and market competition risk. Having a higher CSR score significantly reduces stock return volatility during political uncertainty, but not cash flow volatility. Meanwhile, CSR is also an effective hedge against stock return volatility that arises from peer competition. Finally, the hedging effect of CSR on stock return volatility is transient, but has a positive effect on firms’ future performance and growth opportunities.
| Original language | English |
|---|---|
| Pages (from-to) | 1229-1266 |
| Number of pages | 38 |
| Journal | European Journal of Finance |
| Volume | 29 |
| Issue number | 11 |
| Early online date | 18 Sept 2022 |
| DOIs | |
| Publication status | Published - 24 Jul 2023 |
Keywords
- CSR
- social capital
- risk
- gubernatorial elections
- tariff shocks
- operational hedge
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3rd Climate Solutions Workshop - Climate Solutions Partnership for Highlands & Islands Enterprise
Andriosopoulos, D. (Recipient) & Black, I. (Host)
Sept 2022Activity: Public Engagement and Outreach › Education Outreach
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Can Social Capital and Reputation Mitigate Political and Industry-wide Economic Risk?
Andriosopoulos, D. (Speaker) & Deepty, S. T. (Contributor)
15 Jun 2021 → 18 Jun 2021Activity: Talk or presentation types › Invited talk
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Presentation at the 2019 CSR the Economy and Financial Markets
Andriosopoulos, D. (Speaker) & Deepty, S. T. (Contributor)
10 Oct 2019 → 11 Oct 2019Activity: Talk or presentation types › Invited talk