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- Title
Corporate Social Performance and Stock Returns: UK Evidence from Disaggregate Measures.
- Authors
Brammer, Stephen; Brooks, Chris; Pavelin, Stephen
- Abstract
This study examines the relation between corporate social performance and stock returns in the UK. We closely evaluate the interactions between social and financial performance with a set of disaggregated social performance indicators for environment, employment, and community activities instead of using an aggregate measure. While scores on a composite social performance indicator are negatively related to stock returns, we find the poor financial reward offered by such firms is attributable to their good social performance on the environment and, to a lesser extent, the community aspects. Considerable abnormal returns are available from holding a portfolio of the socially least desirable stocks. These relationships between social and financial performance can be rationalized by multi-factor models for explaining the cross-sectional variation in returns, but not by industry effects.
- Subjects
UNITED Kingdom; FINANCIAL performance; GROWTH industries; PERFORMANCE; EMPLOYMENT; CORPORATE growth
- Publication
Financial Management (Wiley-Blackwell), 2006, Vol 35, Issue 3, p97
- ISSN
0046-3892
- Publication type
Article
- DOI
10.1111/j.1755-053X.2006.tb00149.x