Under the concept of sustainable development of enterprises, corporate social responsibility is an important core of key. Enterprises should not only fulfill their social responsibility, but also pay attention to a series of supply chain in partnership. The main purpose of this study is to examine the announcement effect of corporate social responsibility awards on abnormal returns of winners and their corporate customers of the supply chain; and further explore the difference of announcement effects between the whole sample and the sub-sample of the first time winners.
This study adopts Visionary Corporate Social Responsibility Award (from year 2005 to 2013) and World Citizenship Award (from year 2007 to 2013) as a sample of winning companies, and identifies their supply chain downstream customers as the target of research. Accordingly, I explore the stock price reaction around award announcement dates using event study methods.
I obtained the following main empirical results. First, announcement of Corporate Social Responsibility Awards has a significant positive effect on abnormal returns of winning firms, i.e., investors have positive responses to CSR Awards but the effect seems delayed. Second, downstream customers of CSR Award winning companies exhibit significantly positive average cumulative abnormal return after CSR Awards declaration, indicating the existence of positive contagion effects from award-winning companies to their downstream customers. Finally, both CSR award winning companies and the first time winning companies present positive abnormal stock returns, but the difference between their average cumulative abnormal returns is not significant.
