How Does Corporate Social Responsibility Affect Asymmetric Information: Evidence from Korean Retail Industry

다국어 초록 (Multilingual Abstract)

Purpose – This paper examines how corporate social responsibility of the Korean retail industry affects the degree of asymmetric information. Recent theories predict that a firm’s active engagement in socially responsible activities lowers the degree of asymmetric information of the firm.
Research design, data, and methodology – This paper uses the sum of environmental and social scores (ES), published by the Korean Corporate Governance Service in order to proxy the degree of socially responsible management practices of Korean retail firms. This paper uses the ordinary least square method to investigate the above predictions. The publicly traded Korea retail firms listed in the Korean Exchange are analyzed from 2011 to 2016. To measure the degree of asymmetric information, this paper adopts the analyst dispersion and price impact measures.
Results – This paper shows that the ES score has significantly positive relationships with these two measures of information asymmetry. The environmental score seems to increase the analyst dispersion measure and the social score appears to raise the price impact measure mores significantly.
Conclusions – The results do not support the prior theory expecting a negative relationship between corporate social responsibility and the degree of asymmetric information. Environmental and social scores are found to affect the measures of information asymmetry differently.

참고문헌 (Reference)

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