Analysis of Environmental and Social Scores on Firm Profitability, Lending and Dividends in Germany and the UK

This paper aims to investigate the effects of separate components of corporate social responsibility—social and environmental efforts in particular—on a firm’s operating profit margin, dividends per share and net debt. It also investigates whether such efforts can reduce firm exposure to market risk. One or a combination of these factors may consequently be responsible for lower expected returns on firms with greater ES ratings. For this purpose we study firms on the FTSE-100 and the HDAX from the period 2002-2014. Environmental and social scores for these firms are regressed against operating profit margin, dividends per share and net debt while controlling for relevant factors. The firms are then divided into groups based on their environmental and social rankings and we compare the covariance of their returns with market returns to gauge the relation of their sensitivity (beta) to ES scores. The results of the first part of the study indicate that ES scores are more strongly correlated with OPM, Div/Share and Net debt in HDAX than in FTSE-100. In addition there is a slight positive correlation between firm beta and ES scores, implying increased exposure to market risk.fi=Opinnäytetyö kokotekstinä PDF-muodossa.|en=Thesis fulltext in PDF format.|sv=Lärdomsprov tillgängligt som fulltext i PDF-format

Why do corporations embrace the LGBTQ+ cause?

©2023 Authors. This manuscript version is made available under the Creative Commons Attribution–NonCommercial–NoDerivatives 4.0 International (CC BY–NC–ND 4.0) license, https://creativecommons.org/licenses/by-nc-nd/4.0/fi=vertaisarvioimaton|en=nonPeerReviewed

Essays on Corporate Social Responsibility and its Efficacy in Value Creation

This doctoral dissertation consists of four essays that focus on contemporary CSR-related policies and how they shape stakeholder expectations, corporate behavior, and financial outcomes. The first essay examines whether CSR policies that support sexual minorities can positively affect the firm’s financial performance. We show that LGBTQ friendliness is associated with higher profitability and firm value, and that this effect is significantly stronger in liberal U.S. states. Closely related to this research, the second essay studies the relationship between LGBTQ-friendly policies and firm innovation. We find that LGBTQ friendliness is not only positively associated with higher innovation intensity, but also with several measures of innovation quality, including originality, generality, and a novel measure of the global reach of the patent, its internationality. Together with the findings of the first essay, our results empirically support the claims that diversity and inclusivity are good for business, and underscore the decisive role of external political, social and economic factors. The third essay explores the effects of firm-specific religiosity on CSR. Using a novel identifier of internal firm culture and practice, we determine that firms who cater to faith-driven stakeholders are more socially responsible, and that this relationship is independent of the effects of county-level religiosity. The effects of firm-level religiosity on CSR are particularly strong with respect to product responsibility, emissions reduction, and responsible use of resources. Finally, the fourth essay investigates the role of past CSR as a determinant of employee layoffs during the COVID-19 pandemic. Surprisingly, firms with a history of high ESG performance are found to be more likely to have laid off employees during the pandemic, and also to have laid off significantly more employees than their peers. These results support the theory that CSR affords firms higher strategic agility, and that it may be exploited to avoid negative consequences.Tämä väitöskirja koostuu neljästä toisiinsa liittyvästä esseestä, jotka keskittyvät yritysten yhteiskuntavastuullisuuteen ja erityisesti siihen, miten erilaiset yhteiskuntavastuuseen liittyvät tekijät vaikuttavat sidosryhmien odotuksiin, yritysten käyttäytymiseen ja taloudelliseen menestykseen. Väitöskirjan ensimmäisessä esseessä tutkitaan, miten seksuaali- ja sukupuolivähemmistöjen huomioiminen vaikuttaa yritysten taloudelliseen menestykseen. Tutkimustulokset osoittavat, että LHBTQ-myönteisyys vaikuttaa positiivisesti yhdysvaltalaisten yritysten kannattavuuteen ja markkina-arvoon. Esseessä myös havaitaan, että yritysten LHBTQ-myönteisyyden positiivinen vaikutus menestykseen on vahvempi Yhdysvaltain liberaaleissa osavaltioissa. Toisessa esseessä tarkastellaan LHBTQ-myönteisyyden vaikutusta yritysten innovatiivisuuteen. Tutkimuksessa havaitaan, että seksuaalivähemmistöt paremmin huomioivat yritykset ovat innovatiivisempia ja luovat enemmän patentteja kuin muut yritykset. Ensimmäisen ja toisen esseen tulokset osoittavat kollektiivisesti, että monimuotoisuus ja inklusiivisuus ovat tärkeitä yritysten menestykselle. Kolmannessa esseessä tutkitaan uskonnon ja uskonnollisuuden vaikutusta yritysten yhteiskuntavastuullisuuteen. Tutkimuksessa havaitaan, että yhdysvaltalaiset yritykset, joiden päätöksenteossa heijastuvat kristilliset arvot, ovat keskimäärin yhteiskuntavastuullisempia riippumatta alueellisista eroista uskonnollisuudessa. Uskonnollisuuden vaikutus on erityisen voimakas päästöjen vähentämisen, tuotevastuun ja vastuullisen resurssien käytön osalta. Väitöskirjan neljännessä esseessä tutkitaan yritysten yhteiskuntavastuun vaikutusta työntekijöiden irtisanomisiin COVID-19-pandemian aikana. Ennakko-odotuksista poiketen tutkimustulokset osoittavat, että yhteiskuntavastuullisena pidetyt yhdysvaltalaisyritykset irtisanoivat enemmän työntekijöitään pandemian aikana kuin vähemmän vastuulliset yritykset.fi=vertaisarvioitu|en=peerReviewed

Religiosity and corporate social responsibility : A study of firm‐level adherence to Christian values in the United States

This paper examines the hypothesis that religious firms are more socially responsible. By utilizing a novel measure of religiosity that reflects firm-level adherence to Christian values, we find that religiousness is positively associated with the CSR engagement of large US firms after controlling for county-level religiosity and various firm characteristics. The results indicate that religious firms have higher social and environmental responsibility scores. The positive relationship is particularly strong with respect to product responsibility, emissions reduction, and responsible use of resources. While county-level religiosity does not have any incremental effect on CSR above the influence of firm-level religiousness, we document that the positive linkage between firm-level religiosity and CSR engagement is strengthened by local religiousness. Overall, our empirical findings suggest that faith-driven corporate values may encourage socially responsible behavior.© 2023 The Authors. Corporate Social Responsibility and Environmental Management published by ERP Environment and John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.fi=vertaisarvioitu|en=peerReviewed

Combining low-volatility and momentum : recent evidence from the Nordic equities

This paper investigates the profitability of combined low-volatility and momentum investment strategies in the Nordic stock markets from January 1999 to September 2022. Confirming earlier studies, our results first indicate that both the volatility and momentum effects persist as pure-play strategies. Further, we explore combined strategies using 50/50, double screening, and ranking strategies. Among the long-only portfolios, the momentum-first strategy generates the best Sharpe ratio using the double screening method−slightly outperforming the ranking method. Additionally, all long-only combination portfolios outperform the market in terms of risk-adjusted returns. Combination long-short strategies produce significantly higher risk-adjusted returns than pure-play strategies. Surprisingly, novel evidence suggests that none of the combination long-short strategies outperforms the pure momentum strategy after risk-adjusting the returns using the Fama and French five-factor model, implying that while momentum may enhance the returns from the low-volatility strategy, the reverse is not true for the Nordic stock markets.© 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.fi=vertaisarvioitu|en=peerReviewed

Does Lesbian and Gay Friendliness Pay Off? A New Look at LGBT Policies and Firm Performance

This paper examines the association between LGBT‐friendly corporate policies and firm performance. Using data on US firms from 2003 to 2016, we document that LGBT friendliness is positively associated with firm performance. Specifically, we find strong evidence that more LGBT‐friendly firms have higher profitability and higher stock market valuations. Our results further demonstrate that the positive effect of progressive LGBT policies on firm performance is more pronounced for firms located in more liberal states. Overall, our empirical findings provide support for the view that socially progressive corporate policies and diversity management may create value for the firm.Peer reviewe