Taste, information, and asset prices: implications for the valuation of CSR

• 成果类型: Article
• 署名作者: Friedman, Henry L.; Heinle, Mirko S.
• 署名单位: University of California System; University of California Los Angeles; University of Pennsylvania
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-016-9359-x
• 发表日期: 2016
• 页码: 740-767
• 关键词: corporate social-responsibility; nonfinancial disclosure; private benefits; DISAGREEMENT; investors; cost; preferences; performance; CLIENTELES; Dividends

摘要

Firms often undertake activities that do not necessarily increase cash flows (e.g., costly investments in corporate social responsibility or CSR), and some investors value these non cash activities (i.e., they have a taste for these activities). We develop a model to capture this phenomenon and focus on the asset-pricing implications of differences in investors' tastes for firms' activities and outputs. Our model shows that, first, investor taste differences provide a basis for investor clientele effects that are endogenously determined by the shares demanded by different types of investors. Second, because the market must clear at one price, investors' demands are influenced by all dimensions of firm output even if their preferences are only over some dimensions. Third, information releases cause trading volume, even when all investors have the same information. Fourth, investor taste provides a rationale for corporate spin-offs that help firms better target their shareholder bases. Finally, individual social responsibility can lead to corporate social responsibility when managers care about stock price because price reacts to investments in CSR activities.