International evidence on the relationship between insider and bank ownership and CSR performance

in Corporate Governance: An International Review (2017), 25(1), 41-57

Our study contributes to existing literature by investigating the effects of blockholder and bank ownership on CSR performance within an international context. Prior research has predominantly examined ... [more ▼]

Our study contributes to existing literature by investigating the effects of blockholder and bank ownership on CSR performance within an international context. Prior research has predominantly examined local markets. Additionally, we identify ownership dispersion to strengthen the relationship between investors and CSR and thus provide further evidence on the factors influencing investors’ CSR preferences. Conducting an instrumental variables approach supports our findings that bank ownership is positively and blockholder ownership is negatively related to CSR performance. [less ▲]

Asymmetric information and corporate social responsibility

in Business and Society (2016), 55(3), 458-488

This article addresses the question whether companies benefit from their commitment to corporate social responsibility (CSR). The authors argue that firms which score high on CSR activities build investor ... [more ▼]

This article addresses the question whether companies benefit from their commitment to corporate social responsibility (CSR). The authors argue that firms which score high on CSR activities build investor confidence and find evidence that they benefit from lower information asymmetry. The authors measure information asymmetry by insider trading, which is defined as the trading of a company’s shares by corporate insiders who have an information advantage with the aim to reap gains or avoid losses. Using a sample of U.S. firms listed in the MSCI World Index during the period 2004 to 2013 and the firm- and industry-level CSR rating from Global Engagement Service (GES), the authors show that insider transactions in firms with a high score on CSR activities lead to lower abnormal returns. This investigation extends current literature on the business case for CSR by explaining the influence of CSR activities on asymmetric information [less ▲]

The value relevance of SAM’s corporate sustainability ranking and GRI sustainability reportingin the European stock markets

in Business Ethics : A European Review (2016), 25(1), 1-24

This paper investigates whether relative corporate sustainability as measured by the SAM sustainability ranking and sustainability reporting in terms of Global Reporting Initiative (GRI) application ... [more ▼]

This paper investigates whether relative corporate sustainability as measured by the SAM sustainability ranking and sustainability reporting in terms of Global Reporting Initiative (GRI) application levels are associated with a higher market valuation. We conduct a value relevance study for the 600 largest European companies with the Feltham and Ohlson valuation model as a reference point. Our results indicate that for the observation period 2001 to 2011, the association between corporate sustainability and market value is positive. The empirical evidence of a positive relationship between GRI reporting and market value is statistically significant in some but not all of the model specifications. We find no evidence of interaction between the value relevance of corporate sustainability and sustainability reporting, nor do we find any positive effect of external assurance on the capital market perception of GRI application levels. Our results support the notion that conducting business in accordance with ethical norms is also a shareholder valueincreasing business strategy. However, it is not possible to verify the information given in sustainability reports through external assurance. [less ▲]

Neudefinition der Umsatzerlöse und Anpassung der Größenklassen gem. BilRUG

in Der Betrieb (2016), 26-27

Zum 01.01.2016 sind die Änderungen des HGB in Form des BilRUG verpflichtend in Kraft getreten. Hauptmerkmale der Gesetzesnovelle sind eine Neudefinition des Begriffs der Umsatzerlöse und neue ... [more ▼]

Zum 01.01.2016 sind die Änderungen des HGB in Form des BilRUG verpflichtend in Kraft getreten. Hauptmerkmale der Gesetzesnovelle sind eine Neudefinition des Begriffs der Umsatzerlöse und neue Größenklassen in Bezug auf Jahresabschluss- und Offenlegungspflichten. Während letztere zur Entlastung der Bilanzierer beitragen soll, können die tatsächlichen Effekte durch einen definitionsbedingten Anstieg der Umsatzerlöse gemindert werden. [less ▲]

Does compliance with the German Corporate Governance Code pay off?: An investigation of the implied cost of capital

in Journal of Risk Finance (2015), 16(3), 344-376

This paper aims to empirically investigate the relationship between the level of compliance with the German Corporate Governance Code’s (GCGC) recommendations and the implied cost of equity capital (ICC ... [more ▼]

This paper aims to empirically investigate the relationship between the level of compliance with the German Corporate Governance Code’s (GCGC) recommendations and the implied cost of equity capital (ICC). German listed companies are required by law to annually disclose their compliance with the recommendations of the GCGC. Whether the GCGC achieves its aim to promote the trust of stakeholders in the management and supervision is still an open question [less ▲]

The cross-section of returns, benchmark model parameters, and idiosyncratic volatility of the world’s nuclear energy firms after Fukushima Daiichi

in Energy Economics (2014), 41

This study analyzes how the stock market returns, the factor loadings from the Carhart (1997) 4-factor model, and the idiosyncratic volatility of shares in energy firms have been affected by the Fukushima ... [more ▼]

This study analyzes how the stock market returns, the factor loadings from the Carhart (1997) 4-factor model, and the idiosyncratic volatility of shares in energy firms have been affected by the Fukushima nuclear accident. Unlike existing studies, which provide evidence of a wealth transfer from nuclear to renewable energy firms for specific countries, we use an international sample and investigate whether changes in the regulatory Environment and the firm-specific commitment to nuclear and renewable energies correlate with the capital market's reactions to the Fukushima Daiichi accident. Our findings suggest that the more a firm relies on nuclear power, the more its share price declined after the accident. A commitment to renewable energies does not prevent declines in share prices but significantly helps to reduce the increase in market beta that is associated with this event. Nuclear energy firms domiciled in countries with a higher number of regulatory interventions that were triggered by the catastrophe have lower abnormal returns than those that are domiciled elsewhere. However, as a cross-sectional analysis reveals, a stronger commitment to nuclear power is the main driver for negative stock market returns. Furthermore, nuclear energy firms domiciled in countries with stronger regulatory shifts away from nuclear energy experience significant increases in market beta and the book-to-market equity factor loading according to the Carhart (1997) 4-factor model. We conclude that capital market participants are able to differentiate between the affectedness of firms with respect to their product portfolio. Energy firms could prevent increases in market beta due to catastrophes such as the Fukushima Daiichi accident by shifting some of their energy production from nuclear to renewable or other sources. [less ▲]

The effect of the German Accounting Law Modernization Act (BilMoG) on the earnings quality of private firms

in Corporate Finance (2013), 5

The 2009 Accounting Law Modernization Act (BilMoG) had a considerable impact on German accounting principles, especially in terms of tax regulations, recognition, and measurement options. This paper ... [more ▼]

The 2009 Accounting Law Modernization Act (BilMoG) had a considerable impact on German accounting principles, especially in terms of tax regulations, recognition, and measurement options. This paper analyzes whether these changes have had a positive effect on the quality of earnings reported in German financial statements. We find that earnings management significantly decreased after the implementation of BilMoG. This study is the first to examine potential improvements on earnings quality as a result of BilMoG. Our results indicate that in the run-up to the reform, legislators effectively aligned domestic accounting standards with IFRS principles, which led to improved transparency within financial reporting. [less ▲]