Does the Indian Stock Market encourage Socially Responsible Companies?

2014 ◽  
Vol 1 (1) ◽  
Author(s):  
K. V. Bhanu Murthy ◽  
Varun Bhandari ◽  
And Vishal Pandey
Keyword(s):  
Growth Rate ◽  
Stock Market ◽  
Social Responsibility ◽  
Price Discovery ◽  
Holistic Approach ◽  
Discovery Process ◽  
Socially Responsible ◽  
Corporate Social ◽  
Indian Stock Market ◽  
Price Discovery Process

A paradigm shift has taken place in the conceptual framework of Corporate Responsibility which has led to the emergence of a holistic approach towards Governance, Corporate Social Responsibility and Environmental Accountability. We expect that social responsibility has a distinct and positive effect on the security prices in the stock market. This paper aims at studying the broad trends in the market in terms of ESG, as proxy of socially responsible companies, and NIFTY, as the proxy of general companies, to identify the breaks, if any, and to examine the price discovery process in both the indices, in terms of growth rate. We have identified three periods i.e. pre-crisis, crisis and post-crisis period. We conclude that the growth rate and return is more in ESG index than NIFTY index. Hence, social responsible companies are performing better than general companies both in terms of price discovery and returns, for the whole period. After the crisis the investors had become sensitised to social responsibility and had begun to absorb and internalise the behaviour of socially responsible companies in the price discovery process.

Regulatory overkill? Short-sales ban in Korea

2016 ◽  
Vol 12 (5) ◽  
pp. 673-699
Author(s):  
Jaemin Kim ◽  
Joon-Seok Kim ◽  
Sean Sehyun Yoo
Keyword(s):  
Stock Market ◽  
Price Discovery ◽  
Short Selling ◽  
Market Liquidity ◽  
Informational Efficiency ◽  
Short Sales ◽  
Discovery Process ◽  
Content Type ◽  
Stabilizing Effect ◽  
Price Discovery Process

Purpose The authors investigate the 2008-2009 short-sales ban in Korea, one of the most comprehensive and restrictive short-selling bans worldwide. The purpose of this paper is to examine: whether the ban stopped a destabilizing effect, if there was any, of short-selling activities; whether the ban improved or deteriorated the informational efficiency or the price discovery process of the stock market; and whether the ban had any impact on market liquidity. Design/methodology/approach Multiple regression; vector autoregression analysis; and generalized autoregressive conditional heteroskedasticity analysis. Findings The authors find no evidence that short-sales have a market-destabilizing effect and thus, restricting short-selling has a market-stabilizing effect. On the contrary, the short-selling ban is associated with an increase in return volatility and a deterioration of the price discovery process, particularly for the stocks without derivatives traded on them. The authors also find evidence of a liquidity decrease for short-sale intensive stocks. However, the evidence is inconclusive as to whether the market efficiency and liquidity changes are solely the result of the short-sales ban or the compound effects of both the ban and the concurrent progress of the financial crisis. Originality/value The literature does not provide a conclusive view on the effects of short-sales or restrictions thereof on the stock market. Also, the existing research on recent worldwide shorting bans often lack empirical scope (e.g. 32 stocks for UK; three weeks for USA). In contrast, the short-sales ban in the Korean stock market, one of the most comprehensive and restrictive short-selling bans worldwide, lasted for eight months for all the listed stocks and is still in effect for financial stocks. The authors find no evidence that short-sales have a market-destabilizing effect and thus, restricting short-selling has a market-stabilizing effect.

The relative informational efficiency of stocks, options and credit default swaps during the financial crisis

2014 ◽  
Vol 15 (5) ◽  
pp. 510-532
Author(s):  
Maria Chiara Amadori ◽  
Lamia Bekkour ◽  
Thorsten Lehnert
Keyword(s):  
Financial Crisis ◽  
Stock Market ◽  
Stock Options ◽  
Price Discovery ◽  
The Other ◽  
Informational Efficiency ◽  
Discovery Process ◽  
Content Type ◽  
Credit Default ◽  
Price Discovery Process

Purpose – This paper aims to investigate informational efficiency of stock, options and credit default swap (CDS) markets. Previous research suggests that informed traders prefer equity option and CDS markets over stock markets to exploit their informational advantage. As a result, equity and credit derivative markets contribute more to price discovery compared to stock markets. Design/methodology/approach – In this study, the authors investigate the dynamics behind informed investors’ trading decisions in European stock, options and CDS markets. This allows to identify the predictive explanatory power of the unique information contained in each market with respect to future stock, CDS and option market movements. Findings – A lead-lag relation is found between the CDS market and the other markets, in which changes in CDS spreads are able to consistently forecast changes in stock prices and equity options’ implied volatilities, indicating how the fast-growing CDS market seems to play a special role in the price discovery process. Moreover, in contrast to results of US studies, the stock market is found to forecast changes in the other two markets, suggesting that investors also prefer stock market involvement to exploit their information advantages before moving to CDS and option markets. Interestingly, these patterns have only emerged during the recent financial crisis, while before the crisis, the option market was found to be of major importance in the price discovery process. Originality/value – The authors are the first to study the lead-lag relationship among European stock, option and CDS markets for a large sample period covering the financial crisis.

scholarly journals The Usefulness of Integrated Reports for Stock Market Investors

2014 ◽  
Vol 15 (1) ◽  
pp. 141-151
Author(s):  
Monika Sobczyk
Keyword(s):  
Stock Market ◽  
Social Responsibility ◽  
Stock Exchange ◽  
Financial Information ◽  
Integrated Reporting ◽  
Socially Responsible ◽  
Responsible Investment ◽  
Stock Market Investors ◽  
Investment Portfolios ◽  
Corporate Social

Abstract The huge risks associated with decisions made by key players in the capital market, i.e. investors, encourage them to explore any useful information. Therefore, stock market investors have an increasing interest in expenditures and achievements in all aspects of business activities of any corporation in which they may invest. Traditionally, they look for financial information, and increasingly for non-financial information as well, that all are about activities which are determined by and have implications to the natural environment, the society, and corporate governance (ESG). As a result, this information creates the image of Corporate Social Responsibility (CSR), and investors, who in the construction of investment portfolios take into account non-economic criteria, create Socially Responsible Investment (SRI) market. The aim of the paper is to highlight the need to satisfy market investors' expectations of CSR information by the companies listed on the stock exchange. Secondly, the aim of this paper is to indicate characteristics that make financial and non-financial information presented in Integrated Reports useful for stock market investors. As a result it has been confirmed that there is a need to produce business reports in which corporate approach to social responsibility is taken into account. Moreover, characteristics of non-financial information which are about their usefulness for investors in the process of decision-making have been identified and whether market regulators show an interest in integrated reporting has been established.

La legislación tributaria venezolana como promotora de la responsabilidad social empresarial

Oikos ◽  
2014 ◽  
Vol 16 (33) ◽  
pp. 53
Author(s):  
Ana Cecilia Chumaceiro Hernández ◽  
Judith Josefina Hernández de Velazco
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Tax Law ◽  
Socially Responsible ◽  
Palabras Clave ◽  
Interpretative Approach ◽  
Corporate Social

aVenezuelan Tax Law as a Promoter of Corporate Social Responsibility   RESUMEN El presente artículo tiene por objetivo disertar sobre los dispositivos contenidos en la legislación tributaria venezolana que actúan como promotores de la responsabilidad social empresarial (RSE), para ello se utilizó el paradigma Cualitativo, bajo un enfoque hermenéutico – interpretativo, cuyo método fue análisis de contenido. En tal sentido se han observado los aspectos, elementos y mecanismos que se encuentran en la LISLR, LIVA y LOCTI que fomentan, incentivan o coadyuvan la RSE; finalmente se plantearan lineamientos para la aceptación de una nueva cultura de RSE con dimensión tributaria. Considerando, que dentro de la legislación tributaria no existen dispositivos específicos que promuevan la RSE, y, ello debe ser tomado en cuenta por el legislador para modificar ciertas normas y crear el incentivo necesario para que las empresas sean de forma congruente socialmente responsables. Palabras clave: legislación tributaria, empresa, promoción, responsabilidad social empresarial. ABSTRACT The objective of this study is to explore regulatory provisions from Venezuelan tax law as promoters of corporate social responsibility (CSR). For the methodological analysis of content, the study uses the qualitative paradigm and a hermeneutical-interpretative approach. The research observes different elements and mechanisms from LISLR, LIVA and LOCTI which encourage and contribute to corporate social responsibility. The study also proposes guidelines for the acceptance of a CSR culture from a tax dimension. The fact that there are no regulatory provisions within the Venezuelan tax law needs to be taken into account by legislators in order to amend certain norms and create the necessary incentives for companies to be socially responsible. Keywords: tax law; companies; encouragement; corporate social responsibility. Este trabajo es el resultado de investigaciones que se desarrollan en la línea “Responsabilidad Social, Empresa y Estado” del Centro de Estudios e Investigaciones Socioeconómicas y Políticas (CEISEP-UNERMB). 

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