Shareholder Wealth Effects of Modern Slavery Regulation

• 成果类型: Article
• 署名作者: Cousins, Paul; Dutordoir, Marie; Lawson, Benn; Neto, Joao Quariguasi Frota
• 署名单位: University of Liverpool; University of Manchester; Alliance Manchester Business School; University of Cambridge
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3456
• 发表日期: 2020
• 页码: 5265-5289
• 关键词: Modern Slavery Act; supply chain transparency; event study; socially responsible sourcing; CSR disclosure

摘要

We examine the shareholder wealth effects of the adoption of the UK Modern Slavery Act 2015 (MSA). The MSA's Transparency in Supply Chains clause introduced new reporting requirements mandating certain firms to provide an annual statement outlining how they identify and mitigate modern slavery in their business and supply chain. An event study of stock price reactions of UK firms covered by the MSA to eight events associated with its adoption provides no evidence of abnormal stock returns. We do, however, uncover significant cross-sectional differences in stock price reactions, with results suggesting that the MSA provides a competitive advantage to firms with a demonstrated track record of addressing slavery risk. We find no effects for preregulatory corporate social responsibility disclosure levels on stock price reactions. Our findings highlight the economic value of maintaining socially responsible sourcing practices and inform the current policy debate on the importance of greater transparency in corporate supply chains.