Corporate social responsibility and the market reaction to negative events: Evidence from inadvertent and fraudulent restatement announcements
We advance a theory asserting that CSR performance may exacerbate, not necessarily
moderate, a company's negative stock price response to negative events. In testing this
theory, we hypothesize and find that CSR performance alleviates (magnifies) the immediate
negative stock price response to inadvertent (fraudulent) restatement announcements, and
that these findings are robust to specifications that consider alternative CSR measures and a
multitude of control variables shown by prior research to have explanatory power for the …
moderate, a company's negative stock price response to negative events. In testing this
theory, we hypothesize and find that CSR performance alleviates (magnifies) the immediate
negative stock price response to inadvertent (fraudulent) restatement announcements, and
that these findings are robust to specifications that consider alternative CSR measures and a
multitude of control variables shown by prior research to have explanatory power for the …