Corporate Social Responsibility and Insider Trading

被引:0
作者
Jinhua Cui
Hoje Jo
Yan Li
机构
[1] Korea University,School of Business
[2] Santa Clara University,Leavey School of Business
[3] World Bank Singapore,undefined
来源
Journal of Business Ethics | 2015年 / 130卷
关键词
Corporate social responsibility; Insider trading; Insider transactions; Efficiency improvement;
D O I
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中图分类号
学科分类号
摘要
This study examines the impact of corporate social responsibility (CSR) activities on insider trading. While opponents of insider trading claim that the buying or selling of a security by insiders who have access to non-public information is illegal, proponents argue that insider trading improves economic efficiency and fairness when corporate insiders buy and sell stock in their own companies. Based on extensive U.S. data of insider trading and CSR engagement, we find that both the number of insider transactions and the volume of insider trading are positively associated with CSR activities.We also find that legal insider transactions are positively related to CSR engagement even after controlling for potential endogeneitybias and various firm characteristics. Furthermore, our evidence suggests that firms perceive adjustment to CSR dimension of product as being efficient, while adjustment to diversity and environmental CSR as being inefficient. Our results of bad and illegal insider trading proxies are consistent with the interpretation that firms with high CSR ratings do not attempt to engage in unethical or bad insider trading in a significant fashion. Combined together, we consider our empirical evidence supportive of the fairness and efficiency explanation, but not the unfairness and inefficiency hypothesis.
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页码:869 / 887
页数:18
相关论文
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