Do social responsibility disclosures show improvements on stock price?

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dc.contributor.author Jizi, Mohammad
dc.contributor.author Nehme, Rabih
dc.contributor.author Salama, Aly
dc.date.accessioned 2021-01-26T13:03:01Z
dc.date.available 2021-01-26T13:03:01Z
dc.date.copyright 2016 en_US
dc.date.issued 2021-01-26
dc.identifier.issn 0022-037X en_US
dc.identifier.uri http://hdl.handle.net/10725/12436 en_US
dc.description.abstract The 2007 financial crisis was the largest shock to the financial markets not only to the United States but the world as a whole since 1930. Lack of information and confusion in financial markets causes sharp declines in banks capitalization. The link between stock price behavior and the content of social disclosure is lacking in the literature and there is no clear understanding whether they are valued or disregarded by financial markets. CSR is the voluntary interaction between the firm and its stakeholders through addressing their social and environmental concerns with business activities. This paper contributes to the literature by drawing conclusions on whether CSR disclosure, which communicates firm involvement and level of commitment to society, shows improvement on banks' stock prices. Banks' social behavior is equally important to investors and customers risk assessment on one hand, and to regulators' reputation and the public confidence in the banking system on the other hand. Poorly controlled and operated banks can impose extensive negative effects not only on investors but also on their societies; therefore, effective management manages risk not only through financial performance but also through reflecting their good citizenship. The research examines a sample of national commercial banks, as the banking sector was experiencing increasing pressure that scratched stakeholders and investors trust during the latest financial crisis. In addition to examining a unique sample of banks during 2009-2010, the study contributes by employing content analysis technique to measure the content; i.e. the existence and comprehensiveness; of CSR disclosure in banks' annual reports. We find that the informative content of CSR disclosure is appreciated by stock participants and is of value. The reported results signal investors' interest in and consideration to CSR disclosure when valuing assets. Moreover, our results suggest that management involvement and communication of their CSR activities through better disclosure content is a potential tool to enhance shareholders value. The documented results are likely to encourage banking institutions in the developing countries to invest and report on their social activities. Banking institutions may enhance their shareholders welfare by investing in effectual social engagements and considering the content of CSR disclosure rather than classifying social involvement as nonrewarding activity. en_US
dc.language.iso en en_US
dc.title Do social responsibility disclosures show improvements on stock price? en_US
dc.type Article en_US
dc.description.version Published en_US
dc.author.school SOB en_US
dc.author.idnumber 200201121 en_US
dc.author.idnumber 199710210 en_US
dc.author.department Finance And Accounting en_US
dc.description.embargo N/A en_US
dc.relation.journal The Journal of Developing Areas en_US
dc.journal.volume 50 en_US
dc.journal.issue 2 (Spring 2016) en_US
dc.article.pages 77-95 en_US
dc.keywords Corporate Social Responsibility (CSR) Disclosure en_US
dc.keywords Stock Return en_US
dc.keywords Content Analysis en_US
dc.identifier.doi https://doi.org/10.1353/jda.2016.0075 en_US
dc.identifier.ctation Jizi, M., Nehme, R., & Salama, A. (2016). Do social responsibility disclosures show improvements on stock price?. Journal of Developing Areas, 50(2), 77-95. en_US
dc.author.email mohammad.jizi@lau.edu.lb en_US
dc.author.email rabih.nehme@lau.edu.lb
dc.identifier.tou http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php en_US
dc.identifier.url https://www.jstor.org/stable/24737380?seq=1 en_US
dc.orcid.id https://orcid.org/0000-0002-1911-8215 en_US
dc.orcid.id https://orcid.org/0000-0002-1028-6001 en_US
dc.author.affiliation Lebanese American University en_US

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