Sunday, April 26, 2015
YOLO COUNTY NEWS
99 CENTS

Study: Politically active, ‘responsible’ firms net higher returns

By
From page A18 | November 18, 2012 |

Companies that tout social responsibility and whose managers contribute to political action committees tend to provide higher returns to shareholders, suggests a new UC Davis study.

“Especially for smaller public companies, if the firm has been active in disclosing corporate social responsibility measures and if the individuals in the company are politically active, there’s a good chance you will do better in the stock market if you invest in that company,” said Paul Griffin, a leading international authority in accounting and corporate disclosure and a professor at the Graduate School of Management.

Griffin and co-author Yuan Sun, a doctoral candidate at the Haas School, UC Berkeley, analyzed extensive data on voluntary corporate social responsibility disclosures, campaign contributions and stock performance. Their findings are published in the working paper, “Strange Bedfellows? Voluntary CSR Disclosure and Politics.”

The researchers also found that companies were more likely to make social responsibility disclosures if they were headquartered in a so-called “blue state,” or one that traditionally has voted Democratic in national elections.

“We hypothesized that if a state where a corporation is located is blue, on balance, the customers, the suppliers and even the shareholders have that same tendency to be blue,” Griffin said.

Griffin and Sun determined that companies that issue more press releases on CSRwire, an online news service that publishes reports issued by member organizations on issues related to sustainability and corporate social responsibility tend to have more management employees who contribute to political action committees. The correlation was strongest with individuals who donated to political action committees affiliated with the Democratic Party.

Additionally, the stock market reacted favorably when corporations posted news releases on the CSRwire. The market effect intensified if company managers also made contributions to political action committees.

“The effects on stock values of CSRwire releases are immediate and can continue for up to three months after the disclosure,” Griffin said.

He cautioned that while the correlations are strong, researchers need to look more closely at the underlying pathways whereby CSR disclosure and political contributions combine to produce shareholder gains.

To measure companies’ social responsibility, the researchers studied more than 14,500 news releases posted between 2000 and 2011 by CSRwire. Griffin and Sun identified 4,781 releases that were issued by major, publicly traded U.S. companies.

The researchers also compiled Federal Election Commission data on individual contributions to political action committees for the same 11 years. The commission’s data lists the names, employers and job titles of individuals who donate to committees, as well as the political party affiliation of the committees.

Stock performance was measured by compiling stock movements of firms listed in a large database that includes stock prices of publicly traded firms.

— UC Davis News Service

Comments

comments

  • Recent Posts

  • Enter your email address to subscribe to this newspaper and receive notifications of new articles by email.

  • .

    News

     
    Davis team wins world robotics championship

    By Anne Ternus-Bellamy | From Page: A1 | Gallery

     
     
    Nepal quake death toll exceeds 1,800

    By The Associated Press | From Page: A2 | Gallery

    Spring storm delivers late rain, snow to Northern California

    By The Associated Press | From Page: A2

     
    At the Pond: Plenty of pleasures in our bioregion

    By Jean Jackman | From Page: A3 | Gallery

    Free Family Bike Clinic set Sunday

    By Enterprise staff | From Page: A4

     
    Pioneering organic chef presents her memoir Monday

    By Special to The Enterprise | From Page: A4

    Suspect in UCD assault arrested

    By Lauren Keene | From Page: A4

     
    Dog park marks anniversary with cleanup

    By Special to The Enterprise | From Page: A4

    Rail-safety bill passes Senate committee

    By Special to The Enterprise | From Page: A4

     
    Watch them in action

    By Julia Ann Easley | From Page: A5

    Stocks rise on tech earnings; Nasdaq adds to record

    By The Associated Press | From Page: A8

     
    Dodd speaks as part of public policy series

    By Special to The Enterprise | From Page: A9

    We did it (together)!

    By Enterprise staff | From Page: A10

     
    $2.72 million judgment ordered against Dollar Tree Stores

    By Special to The Enterprise | From Page: A10

    UCD hosts bike auction Saturday, May 2

    By Enterprise staff | From Page: A11 | Gallery

     
    Fly Fishers to hear about advanced streamer tactics on Tuesday

    By Special to The Enterprise | From Page: A11 | Gallery

    Bicycle activist will speak Monday at Hall of Fame

    By Enterprise staff | From Page: A11 | Gallery

     
    .

    Forum

    Those texts still linger

    By Creators Syndicate | From Page: B6

     
    New ways of giving locally and beyond

    By Marion Franck | From Page: B6

     
    Study questions accuracy of tumor gene mapping

    By The Associated Press | From Page: B6

    Poker proceeds help youths

    By Letters to the Editor | From Page: A12

     
    Invest in water of the future

    By Letters to the Editor | From Page: A12

    Water, water everywhere?

    By Letters to the Editor | From Page: A12

     
    Mayor’s Corner: A spirit of renewal permeates Davis

    By Special to The Enterprise | From Page: A12

    More work to do for a safe Picnic Day

    By Our View | From Page: A12

     
    Tom Meyer cartoon

    By Debbie Davis | From Page: A12

     
    Anaheim, where The Force is with you

    By Sebastian Onate | From Page: A13 | Gallery

    .

    Sports

    Davis gets two baseball wins in two days

    By Spencer Ault | From Page: B1

     
    Grizzlies dominate young Blue Devils on Senior Night

    By Thomas Oide | From Page: B1 | Gallery

    Energy, fan-friendly happenings highlight UCD spring football game

    By Bruce Gallaudet | From Page: B1 | Gallery

     
    Blue Devil golfers capture CAL Invitational title

    By Enterprise staff | From Page: B1

    Blue Devil swimmers are up to the challenge

    By Enterprise staff | From Page: B2 | Gallery

     
    UCD roundup: Aggies reach water polo semifinals

    By Enterprise staff | From Page: B2

    Babich brings the heat as DHS girls stick it to Oak Ridge

    By Enterprise staff | From Page: B12 | Gallery

     
    DHS softball struggles continue against Sheldon

    By Enterprise staff | From Page: B12 | Gallery

    .

    Features

    .

    Arts

    History comes alive in ‘The Sacramento Picture’

    By Derrick Bang | From Page: A1 | Gallery

     
    .

    Business

    Yolo County real estate sales

    By Zoe Juanitas | From Page: A7

     
    Big Italian food, sports bar to fill Little Prague

    By Wendy Weitzel | From Page: A7 | Gallery

    Davis Roots hires new general manager

    By Special to The Enterprise | From Page: A8

     
    Comcast announces speed upgrade

    By Special to The Enterprise | From Page: A8

     
    .

    Obituaries

     
    Whitney Joy Engler

    By Special to The Enterprise | From Page: A6

    Valente Forrest Dolcini

    By Special to The Enterprise | From Page: A6

     
    .

    Comics

    Comics: Sunday, April 26, 2015

    By Creator | From Page: B8