Rhetoric, Reality, and Reputation Do CSR and Political Lobbying Protect Shareholder Wealth against Environmental Lawsuits?

We investigate whether firms' corporate social responsibility (CSR) reputations and environmental lobbying efforts protect shareholder wealth in the event of environmental lawsuits. Using a sample of lawsuits filed in United States Federal Courts, we find that firms with superior CSR reputation...

Full description

Saved in:
Bibliographic Details
Published in:Journal of financial and quantitative analysis Vol. 55; no. 2; pp. 679 - 706
Main Authors: Liu, Chelsea, Cheong, Chee Seng, Zurbruegg, Ralf
Format: Journal Article
Language:English
Published: Seattle Cambridge University Press 01.03.2020
Subjects:
Alternative approaches
Courts
Emissions
Environmental impact
Environmental policy
Expenditures
Falsification
Fines & penalties
Greenhouse gases
Hypotheses
Insurance
Litigation
Lobbying
Oil spills
Politics
Propensity
Quantitative analysis
Reputations
Rhetoric
Shareholders wealth
Social responsibility
Stockholders
Valuation
Wealth
ISSN:0022-1090, 1756-6916
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We investigate whether firms' corporate social responsibility (CSR) reputations and environmental lobbying efforts protect shareholder wealth in the event of environmental lawsuits. Using a sample of lawsuits filed in United States Federal Courts, we find that firms with superior CSR reputations suffer worse market reactions to environmental allegations. In contrast, lobbying cushions filing-date valuation losses, providing insurance-like protection against lawsuits. Our results are robust to subsample analyses, a falsification test, propensity score matching, and alternative empirical proxies and model specifications.
Bibliography:ObjectType-Article-1
SourceType-Scholarly Journals-1
ObjectType-Feature-2
content type line 14
ISSN:0022-1090
1756-6916
DOI:10.1017/S0022109019000073