Does the Stock Market Favor Socially Responsible Firms? Evidence from SEOs

Friday, February 9, 2018 - 2:30pm to 3:30pm
SDSB Faculty Lounge

Speaker’s Profile
Professor Chou earned his Ph.D. in finance from Drexel University, USA. He is currently a professor at the College of Management of Taiwan Normal University, and concurrently the Director of a dual master's degree in international business. His research interests include corporate finance, corporate governance and corporate social responsibility. In addition to serving as a faculty member, Professor Chou has been working on research projects sponsored by the Ministry of Science and Technology for many years in his academic career. He was previously a visiting scholar at University of Washington at Seattle. With regard to his practical experience, he has served as a panel member in governance reviewing committee of Taipower Corporation, Chinese Petroleum Corporation and Taiwan Sugar Corporation. He is currently also an independent director of board member at Nanoplus Corporation(listed in Taiwan). His research has been published in Journal of Financial and Quantitative Analysis, Journal of Business Finance and Accounting, North American Journal of Economics and Finance, Journal of Business Research.

Several scholars have inferred that firms following principles of corporate social responsibility (CSR) exhibit features that differ from other firms. In this study, we examine how these features might influence market participants’ preferences in the contexts of announcement effects of seasoned equity offerings (SEOs) and long-term stock performance. Our  study advances the literature by classifying socially responsible firms into seven focuses based on the major category of their CSR activities. Overall, we find that socially responsible firms generate less negative announcement returns in comparison to non-CSR firms on the issuance of SEOs, which suggests that return premiums yield lower discounts for socially responsible firms during SEO events