Corporate social responsibility, stock salience, and the asymmetric market impact of consumer sentiment news on Spanish firms

Oliver, Barry, Pérez-Gladish, Blanca and Mendex, Paz (2015) Corporate social responsibility, stock salience, and the asymmetric market impact of consumer sentiment news on Spanish firms. Review of Behavioral Finance, 7 2: 98-115. doi:10.1108/RBF-05-2014-0030

Author Oliver, Barry
Pérez-Gladish, Blanca
Mendex, Paz
Title Corporate social responsibility, stock salience, and the asymmetric market impact of consumer sentiment news on Spanish firms
Journal name Review of Behavioral Finance
ISSN 1940-5979
Publication date 2015
Sub-type Article (original research)
DOI 10.1108/RBF-05-2014-0030
Open Access Status Not Open Access
Volume 7
Issue 2
Start page 98
End page 115
Total pages 18
Place of publication Bingley, United Kingdom
Publisher Emerald Group
Collection year 2016
Language eng
Formatted abstract
Purpose: The purpose of this paper is to identify whether the Spanish stock market experiences a negativity effect on the announcement of Spanish consumer sentiment information and if firms that are signatory to the UN Global Compact on corporate social responsibility are relatively more salient in the minds of investors.

Design/methodology/approach: The authors use consumer sentiment announcements to show how the negativity effects on the Spanish stock market are significantly influenced by how salient the stock is in the minds of investors. If a firm’s stock exhibits negativity effects on the release of consumer sentiment information then this stock is salient to investors. If firms who are signatory to the UN Global Compact exhibit significant negativity effects, it could be concluded that these stocks are salient, particularly if firms that are not signatory to the Global Compact do not exhibit a similar negativity effect.

Findings: The IBEX35 index experiences significant negativity effects upon the release of Spanish consumer sentiment announcements. This is similar to that reported in other countries, notably Australia and the USA. Using the constituent firms in the IBEX35 index, the authors find that those firms that are signatory to the UN Global Compact are significantly more likely to experience negativity effects upon the release of Spanish consumer sentiment information than if they are not signatory to the Global Compact. This indicates that firms that are part of the UN Global Compact are more salient to investors.

Research limitations/implications: Available published Spanish data on consumer sentiment.

Practical implications: Little is understood of the impact that consumer sentiment announcements have on stock prices. Studies in USA and Australia have identified significant negativity effects in stock markets when consumer sentiment information is released. This research has found that a psychological negativity bias occurs in firms that are salient to investors. Salience has been found to be important in asset pricing.

Originality/value: This paper tries to find out which companies are more likely to sign the UN Global Compact. These companies are more sensitive to consumer sentiment, because they depend on the everyday decisions of the consumers. The more the companies depend on consumers, the more they care about them. And, when the consumer sentiment goes down, they are more affected by this sentiment. These firms are also more worried about the long term. They are not only thinking about the profits in the short term but also about maintaining the generation of profits in the long term.
Keyword Salience
Stock market
Corporate social responsibility
Consumer sentiment index
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2016 Collection
UQ Business School Publications
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Created: Thu, 08 Oct 2015, 13:58:30 EST by Karen Morgan on behalf of UQ Business School