IDEAS home Printed from https://ideas.repec.org/a/eme/srjpps/v12y2016i1p54-68.html
   My bibliography  Save this article

Do ethical firms create value?

Author

Listed:
  • Khondkar Karim
  • SangHyun Suh
  • Jiali Tang

Abstract

Purpose - – This study aims to examine the value relevance of ethics information. Design/methodology/approach - – This study adopts event study methodology to test the market’s reaction around the announcements of World’s Most Ethical Companies (WME), a ranking based on firms’ overall corporate social responsibility performance. The authors calculate the abnormal returns of firms on the WME lists to investigate how stockholders respond to the disclosure of ethical information. Findings - – The authors find significant and positive abnormal returns around the announcements of the lists of ethical firms. Specifically, positive market reaction on the first day after the WME announcement (Day 1) is observed. Originality/value - – This study contributes to the existing literature of the relationship between business ethics and firm value. The authors provide evidence that ethics can be aligned with firms’ financial goals. Further, this study is the first to use the WME announcement as a proxy for ethical firms.

Suggested Citation

  • Khondkar Karim & SangHyun Suh & Jiali Tang, 2016. "Do ethical firms create value?," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 12(1), pages 54-68, March.
    • Handle: RePEc:eme:srjpps:v:12:y:2016:i:1:p:54-68
    DOI: 10.1108/SRJ-09-2014-0127
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/SRJ-09-2014-0127/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/SRJ-09-2014-0127/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/SRJ-09-2014-0127?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Niknamian, Sorush, 2019. "Corporate social responsibility and value creation," OSF Preprints bj7xr, Center for Open Science.
    2. Suparak Suriyankietkaew & Krittawit Krittayaruangroj & Nacharee Iamsawan, 2022. "Sustainable Leadership Practices and Competencies of SMEs for Sustainability and Resilience: A Community-Based Social Enterprise Study," Sustainability, MDPI, vol. 14(10), pages 1-36, May.
    3. Wanling Rudkin & Charlie X Cai, 2019. "Reaction Asymmetries to Social Responsibility Index Recomposition: A Matching Portfolio Approach," Papers 1911.12582, arXiv.org.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:srjpps:v:12:y:2016:i:1:p:54-68. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.