| dc.description.abstract | Recently, corporate social responsibility (CSR) has become integral to the operations of many large businesses. With its increasing prominence has come an expanding debate about the financial implications of CSR and CSR reporting. This thesis examines the effects of releasing annual CSR reports on stock prices and trading volume on two different sample groups. This thesis hypothesizes first that releasing CSR reports will not have a significant impact on stock price and second, that releasing CSR reports will influence trading volume significantly. These hypotheses were tested with two separate samples of 20 companies each from the S&P 500. These samples were tested in an event study accounting for market adjustments. Overall, we find that there is no significant relationship between releasing an annual CSR report and stock price during the event window for either sample group, most likely attributed to the efficient market hypothesis. The results do indicate a significant response in trading volume for the first sample group, but not the second. This provides evidence that investors do care about and act upon CSR information. However, their reaction might depend on the information environment. In summary, although no significant price impacts were detected, investors do respond in certain environments to CSR information in the form of abnormal volume. | |
