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Corporate Social Responsibility and Post Earnings Announcement Drift: Evidence from Korea

1
College of Global Business and Technology, Sungkyul University, Anyang-si 14097, Korea
2
Department of Business Administration, Hansei University, Gunpo-si 15852, Korea
*
Author to whom correspondence should be addressed.
Academic Editor: Sebastian Kot
Sustainability 2021, 13(11), 6496; https://0-doi-org.brum.beds.ac.uk/10.3390/su13116496
Received: 26 April 2021 / Revised: 2 June 2021 / Accepted: 3 June 2021 / Published: 7 June 2021
(This article belongs to the Section Economic and Business Aspects of Sustainability)
To promote corporate social responsibility (CSR) in emerging markets such as South Korea to the level of developed nations, support from capital market investors is necessary. That is, CSR activities expand if capital market investors actively invest in companies that pursue such activities. This study thus analyzes the influence of the level of CSR activities on the post-earnings-announcement drift (PEAD) of publicly listed companies in South Korea, given the need to analyze the relationship between capital markets and CSR, which is part of sustainability management strategies. A sample of Korean firms listed on the Korean Stock Exchange from 2014 to 2018 was used for the regression analysis. The financial and stock return data were extracted from the KIS-Value database and CSR activities data were collected from the Korea Economic Justice Institute (KEJI) Index. The empirical analysis determined that more inactive companies in terms of CSR exhibited greater PEAD magnitude. Furthermore, high information asymmetry was found to further increase the magnitude of PEAD. These results indicate that investors cannot make swift investment decisions because of their low confidence in the information disclosed by inactive CSR companies; as a result, earnings information is slowly reflected in the stock prices of the period following disclosure. These findings suggest that CSR plays an important role in boosting investor confidence in corporate earnings information. View Full-Text
Keywords: corporate social responsibility; KEJI index; post earnings announcement drift; emerging market corporate social responsibility; KEJI index; post earnings announcement drift; emerging market
MDPI and ACS Style

Choi, H.; Ryu, H. Corporate Social Responsibility and Post Earnings Announcement Drift: Evidence from Korea. Sustainability 2021, 13, 6496. https://0-doi-org.brum.beds.ac.uk/10.3390/su13116496

AMA Style

Choi H, Ryu H. Corporate Social Responsibility and Post Earnings Announcement Drift: Evidence from Korea. Sustainability. 2021; 13(11):6496. https://0-doi-org.brum.beds.ac.uk/10.3390/su13116496

Chicago/Turabian Style

Choi, Hyunjung, and Haeyoung Ryu. 2021. "Corporate Social Responsibility and Post Earnings Announcement Drift: Evidence from Korea" Sustainability 13, no. 11: 6496. https://0-doi-org.brum.beds.ac.uk/10.3390/su13116496

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