On the basis of an interdisciplinary approach linking taxation, marketing, and corporate social responsibility, the present research investigates the effects of media reports on aggressive and responsible corporate tax strategies (CTSs) on corporate success with consumers. By means of two laboratory experiments (N = 150, 360), we analyze the effects of the CTSs on corporate reputation, consumer purchase intention, and the consumer’s willingness to pay. Our results suggest that aggressive CTSs diminish corporate success with consumers, whereas responsible CTSs enhance it. (...) Nevertheless, consumers are not willing to pay a price premium for products sold by responsible tax-planning companies, but rather punish aggressive tax-planning companies through a slightly lower willingness to pay. Finally, consumers’ tax morale and their attitude toward tax avoidance are important moderating variables. Given the growing level of media interest in taxation, our findings are crucial for assessing consumer-related non-tax costs and the benefits of different CTSs. (shrink)

Although a lot of research establishes consumer reactions to corporate social responsibility (CSR), little is known about the theoretical mechanisms for these reactions. We conduct a field experiment with adult consumers to test the hypothesis that the effects of perceived CSR on consumer reactions are mediated by felt gratitude and moderated by the magnitude of altruistic values held by consumers. Two classes of consumer reactions are considered: intentions to (1) say positive things about the company, and (...) (2) participate in advocacy actions benefiting the company. (shrink)

Purpose The purpose of this paper is to explore the nuances of the consequences of greenwashing in the consumer and financial markets. Greenwashing is discussed frequently but in very abstract terms. Hence, a closer examination of the palpable consequences elucidates the ripple effects of this widespread phenomenon. Design/methodology/approach Focal points are the concept of green marketing, the stigmatization of corporations in the media and the regulatory consequences of greenwashing behaviour across consumer and financial markets. The two markets are paralleled in (...) order to trace the novelties as well as the points of commonality in greenwashing. Findings The current consequences are an insufficient deterrence in both markets. The regulatory trend in both markets is leaning towards more stringent and punitive measures, which will likely affect the efficacy of the deterrence factor. Originality/value The influence on consumer perception is identified both as a motivating factor for greenwashing and as one of the most immediate elements which is negatively influenced by its exposition. In addition to the fact that greenwashing practices are common across the two markets, this paper identifies that a systemic deterioration of investor trusts significantly compromises the potential of sustainable finance and impacts investment in the financial market, mirrored in the negative consequences on consumer reactions to greenwashed products. (shrink)

This research investigates the impact of corporate tax strategies on consumers’ corporate social responsibility perceptions, willingness to pay, and attitude toward the firm in two laboratory experiments in the United States and Germany. Using the Becker–DeGroot–Marschak incentive-compatible mechanism, which avoids a social desirability bias found in prior research, our results indicate only a minor indirect effect of corporate tax strategies on WTP by way of the mediator CSR perceptions. However, we find a strong effect on attitude toward the firm again (...) mostly mediated by CSR perceptions. In contrast to German consumers, U.S. consumers’ CSR perceptions of tax avoidance are independent of whether a strategy is likely accepted by the tax authorities. Overall, we conclude that CSR perceptions are highly relevant when it comes to consumer responses to tax avoidance. (shrink)

Ethical business practices have been widely prescribed, but why? Consumers views on unethical business practices have been studied, but possibly more important to marketers and researchers are consumer actions and reactions to unethical business practices and the businesses themselves. Do consumers react negatively, or in such a way as to "punish" the unethical business? If so, what is the nature and extent of the punishment? This research seeks answers to these questions by examining consumer reactions, such as complaining (...) and switching, to instances of unethical business practices. Using equity theory, this research proposes that consumers should be willing to tolerate some unethical behavior as long as they feel their investments and outcomes remain proportionately equal. Consumers who perceive that their outcome/investment ratio is proportionately unequal to their comparison other will respond by switching or complaining. In this research consumers were exposed to two types of service failures with different levels of service recovery in vignettes. Costs incurred by the consumer during the service transaction were also manipulated in the vignettes. Significant differences were found for complaint behavior in the failure recovery vignettes tested. Specifically, voice complaint was higher in the high cost service encounters in both types of services tested. The recovery attempt used (ethical, unethical, or none) led to significance differences in the variables of complaint, voice complaint, satisfaction, and quality. Higher satisfaction and quality ratings were found for the ethical recovery attempt and higher intentions to use complaint and voice complaint in the unethical recovery attempts. One significant interaction between cost and recovery attempt was found. Intentions to use voice complaint were higher in the high cost situations of ethical and unethical recovery, while approaching equality at the no recovery attempt. (shrink)

In this research, we evaluate the response of Brazilian consumers to corporate social responsibility (CSR) initiatives accompanied by a price increase. We demonstrate that the extent to which Brazilian consumers perceive a company to be socially responsible (i.e., their CSR perceptions) is related to both the basic transactional outcome of purchase intentions as well as two relational outcomes: the likelihood to switch to a competitor and to complain about the CSR-based price increase. More interestingly, we find that these relationships are (...) jointly mediated by the consumers’ perceptions of price fairness and feelings of personal satisfaction. Perhaps most interesting, we find that these mediating effects vary with consumer purchasing power; the mediating effect of price fairness on purchase intention is stronger for lower income than for higher income consumers, whereas the mediating effects of personal satisfaction on switching and complaining intentions are stronger for higher income than for lower income consumers. (shrink)

In this research, we evaluate the response of Brazilian consumers to corporate social responsibility (CSR) initiatives accompanied by a price increase. We demonstrate that the extent to which Brazilian consumers perceive a company to be socially responsible (i.e., their CSR perceptions) is related to both the basic transactional outcome of purchase intentions as well as two relational outcomes: the likelihood to switch to a competitor and to complain about the CSR-based price increase. More interestingly, we find that these relationships are (...) jointly mediated by the consumers' perceptions of price fairness and feelings of personal satisfaction. Perhaps most interesting, we find that these mediating effects vary with consumer purchasing power; the mediating effect of price fairness on purchase intention is stronger for lower income than for higher income consumers, whereas the mediating effects of personal satisfaction on switching and complaining intentions are stronger for higher income than for lower income consumers. (shrink)

Motivated by a large literature on how firm-specific resources drive firm performance, we propose and find that heterogeneity in investor optimism regarding firm-specific attributes plays a very important role in influencing the managerial propensity to manipulate financial statements. When firm-level investor optimism is moderate, the incidence of accounting misconduct increases, but it decreases when investors are highly optimistic. Further, market reaction to the announcement of financial restatements is more negative when investors held more optimistic firm-specific beliefs at the time of (...) initial misstatement. These findings are robust to alternative firm-specific optimism measures linked to analysts, general investors and unsophisticated individual investors, controls for market-wide consumer sentiment unexplained by macroeconomic factors, economy-wide and industry-level optimism, potential selection bias and reverse causality. Our analysis highlights the importance of firm-level investor optimism in predicting, preventing and detecting accounting misconduct. (shrink)

The use of airbrushed “thin ideal” models in advertising creates major ethical challenges: This practice deceives consumers and can be harmful to their emotional state. To inform consumers they are being deceived and reduce these negative adverse effects, disclaimers can state that the images have been digitally altered and are unrealistic. However, recent research shows that such disclaimers have very limited impact on viewers. This surprising result needs further investigation to understand how women who detect that images have been airbrushed (...) are still harmed by them. Three studies reported in this article address this question. The authors identify a typology, based on a combination of three emotional reactions experienced by women who are exposed to the airbrushed thin ideal. In further analyses, they investigate how detection of airbrushing—whether spontaneous or with the help of a disclaimer—relates to these emotional reactions and women’s attitudes to altered images. Results show that detection of airbrushing does not systematically protect women from either wanting to look like airbrushed thin models or the negative emotions triggered by exposure to thin ideal images, nor does it always generate defensive reactions toward ads using such images. Women who detect that images have been airbrushed may still process these images as realistic. In addition to discussing this irrational process of self-deception, this article suggests policy interventions to prevent it. (shrink)

What motivates manufacturing companies to make costly investments in producing in an environmentally clean manner? The traditional argument is that such behaviour is value reducing, and that therefore, firms must be forced by regulation to invest in “green” production processes. A counter-argument is that firms have an incentive to make environmental investments in an attempt to attract “green” consumers and investors, hence gaining competitive advantage over their rivals. In this paper, we employ a game-theoretic approach that demonstrates that competing firms’ (...) incentives to make voluntary investments in environmental “clean-up” are affected by the size of the investment costs and the extent of consumer and investor “green” awareness. We argue that an increase in green behaviour can be induced by a combination of governmental subsidies for firms that invest in environmentally clean production processes, together with an education program that promotes “green” awareness amongst consumers, investors and the managers themselves. (shrink)

While most studies dealing with waste reduction at the consumer level focus on recycling, this paper rather concentrates on precycling strategies and purchasing behaviors in order to understand how to promote waste reduction at the source. More specifically, the purpose of this work is to grasp consumers’ perceptions of overpackaging and understand the mechanisms underlying their choice of overpackaged versus non-overpackaged food products. Based on the different themes that emerged from a qualitative study, a quantitative research was conducted among French (...) interviewees in order to identify relevant groups of consumers. Five profiles emerged from the cluster analysis: the supporters, the self-sacrificing, the detractors, the indifferent, and the self-centered. Finally, an experiment was conducted that highlights the influence of range positioning and salience of non-overpackaging on consumer choice. Implications for public policy makers and companies are discussed. (shrink)

The current study investigates the effects of green advertising and a corporation’s environmental performance on brand attitudes and purchase intentions. A 3 × 3 (firm’s environmental performance and its advertising efforts as independent variables) experiment using n = 302 subjects was conducted. Results indicate that the negative effect of a firm’s low performance on brand attitudes becomes stronger in the presence of green advertising compared to general corporate advertising and no advertising. Further, when the firm’s environmental performance is high, both (...) green and general corporate advertising result in more unfavorable brand attitudes than no advertising. The study’s counter-intuitive findings are explained by attribution theory. (shrink)

This research examines how and why reactions to other consumers’ unethical behavior differ among consumers and vary in different situations. Drawing on construal level theory, the authors propose that the relationship between other consumers’ unethical behavior and focal consumers’ unethical behavior is moderated by focal consumers’ construal level, and self-expressiveness mediates this moderating effect. Specifically, consumers at higher construal levels tend to view their behavior as more self-expressive and are thus less likely to imitate other consumers’ unethical behavior. Study (...) 1 indicates that focal consumers who have a chronic tendency to construe information at high levels are less likely to replicate other consumers’ unethical behavior than those who have a chronic tendency to construe information at low levels. Studies 2, 3a and 3b show that when primed with higher-level construals, consumers are less likely to follow other consumers’ unethical behavior than when primed with lower-level construals. The mediating effect of self-expressiveness was tested and supported in Study 1 and Study 3b. These findings help to better understand consumers’ reactions to other consumers’ unethical behavior. (shrink)

This paper examines the impact on firm value created by investor reaction to same day news of corporate social responsibility and corporate social irresponsibility activities. First, using trading volume, the authors establish that the perceived value of moral capital generated by news involving institutional stakeholders is less clear to investors than that of the news involving technical stakeholders. Subsequently, the authors analyze abnormal returns from 565 unique firm events—each comprising at least one positive and one negative stakeholder news item. Using (...) signaling theory, the authors demonstrate that news of the number of CSR activities involving institutional groups counteracts the effects of same day CSiR news in an inverted U-shaped fashion. In contrast, they find that news of the number of CSR activities involving technical groups mitigates the effects of same day CSiR news in a U-shaped fashion. (shrink)

There is an emerging consensus in the corporate social responsibility literature suggesting that the quest for the so-called business case for CSR should be abandoned. In the same vein, several researchers have suggested that future research should start examining not whether, but rather when CSR is likely to have strengthened, weakened or even nullified effects on organizational outcomes :69–74, 2012). Using perspectives from several theoretical frameworks, we contribute to the literature by empirically examining the tension between functional and sustainability attributes (...) in a novel context, namely that of green e-banking services. The findings indicate that the positive effect of CSR on users’ attitudes towards green e-banking services is moderated by two primarily utilitarian information systems factors—namely perceived ease of use and perceived usefulness—and an important utilitarian individual difference variable—namely perceived self-efficacy with technology. Our findings are also important if interpreted within the context of the ethical decision-making literature :375–413, 2005), as they indicate that the linkage between moral judgment and moral outcomes is unlikely to be that straightforward. (shrink)

This article examines perceptions of and response to food risk by consumers who are allergic to or intolerant of certain food types. Food risk in general and risk related to genetically modified food are discussed, as well as issues of responsibility and judgment regarding food labeling. Eight hundred individuals were recruited for a postal questionnaire study. The response rate was 63% for allergic people and 59% for nonallergic. The results suggest that the experience of personal harm from food in the (...) form of allergic or intolerant reactions can influence how people evaluate food risk. For example, the ranking of food risks demonstrated a difference of perception with respect to naturally occurring food allergens. The allergic group was more disposed to buy genetically modified products that had been engineered not to contain allergens. Allergic consumers also were inclined to take more individual responsibility for risk avoidance than consumers without allergies. (shrink)

We use an event study to capture the investor reaction to the first Newsweek Green Rankings in September 2009, a notable, multi-dimensional recent development in the rating of corporate environmental CSR performance. Drawing on stakeholder theory, we develop hypotheses about market investor reaction to the disclosure of new, relevant corporate environmental performance in both the short and longer term, whether market investors’ reaction reflects industry context, and whether firm-level contextual variables representing firm size, and market legitimacy significantly impacts the investor (...) reaction. We find that, for the sample of the largest 500 US firms ranked by Newsweek, investors react positively both to the raw and within-industry rankings of green performance in terms of both short-term and longer-term returns. Moreover, the investor reaction is significantly influenced by contextual variables such as firm size and firm market legitimacy. Our results are compatible with the inference that rating agencies like Newsweek serve a valuable information dissemination function such that investors in better ranked firms anticipate larger future cash flows due to more positive reactions from key stakeholders such as environmentally-conscious customers, employees, NGOs, regulators, and thus reward these firms with stock price increases. Finally, larger, more visible firms benefit more, while firms which have more market legitimacy benefit less. We believe these findings will be of considerable interest to scholars of environmental corporate social responsibility. (shrink)

Since the late 1990s, the number of apologies being offered by CEOs of large companies has exploded. Communication and management scholars have analyzed whether and why some of these apologies are more effective or more ethical than others. Most of these analyses, however, have remained at the anecdotal level. Moreover, the practical, economic consequences of apologies have not been examined. Almost no rigorous or systematic empirical work exists that examines whether stakeholders reward firms whose CEOs give apologies that are more, (...) rather than less, ethical; and punish firms whose corporate apologies are not ethically sound. This lacuna is surprising given that the whole purpose of an apology is to restore trust between the apologizer and the recipients of the apology. It is also surprising, given that stock market participants do appear, in at least some cases, to evaluate and respond to apologies by CEOs. When Johnson and Johnson was hit by the Tylenol poisonings, its stock price plummeted. One day after CEO James Burke’s apology—an apology widely praised for being ethically sound—approximately a half billion dollars of its previously lost stock value was restored. It appears, then, that a good CEO apology may lead to an increased stock value ceteris paribus. But is the Johnson and Johnson case representative of how the market responds in general to CEO apologies? (shrink)

Corporations, which in the past have been hesitant to contribute to conversations regarding political and social issues, are increasingly speaking out on current issues such as race, sexual orientation, gender, immigration, and environmental issues. Despite this trend, limited academic research has focused on how corporate sociopolitical activism (CSA) efforts impact firm value. In addition, extant studies have not fully identified the extent to which the firm and their message influence the outcomes of this approach. The current study explores how sociopolitical (...) stances communicated on Twitter affect firms’ stock prices. Results from an event study of 260 incidents of CSA show that CSA efforts decrease firm value by an average of 0.22%, indicating that wading into social or political issues is a risky strategy. However, further analysis highlights the importance of clearly articulating stances on social issues that align with the firm’s core values. (shrink)

Corporate social irresponsibility (CSI) and other questionable business incidents that appear to harm stakeholders frequently afflict firms yet draw disparate investor reactions. We address this disparity by investigating the association between firm legal orientation and investor reactions to CSI. We hypothesize the proportion of board members and top management team (TMT) executives with law degrees affects investor perceptions of firm foresight, and in turn, their judgment of blame and consequent punishment. Based on abnormal returns to 629 announcements of (...) CSI and 308 publicly traded S&P 500 firms, we find that both too small and too large a proportion of board of directors and TMT members with law degrees lead investors to mete out harsher punishment. This inverted u‐shaped link is further affected by firm size, firm risk, and industry competition. Our investigation sheds light on the link between executive education and financial performance in the context of CSI and investor perceptions of foresight. (shrink)

This study examines consumer reactions to the food industry’s environmental corporate social responsibility by varying levels of CSR and price as CSR tradeoffs. Findings reveal that proactive CSR programs generate more favorable attitudes toward and stronger intent to purchase from the company compared to passive CSR programs. Supportive communication intention also increases with CSR level in the low price condition. Regarding the impact of price, respondents showed more positive attitudes toward a company that charges cheaper prices in general. However, (...) when a company demonstrates proactive initiatives, respondents did not distinguish between prices and showed generally positive intent to support and intent to purchase from the company. When a company practices passive CSR and offers cheaper products, respondents showed the weakest supportive and purchase intentions. (shrink)

Researchers and companies are paying increasing attention to corporate social responsibility programs and the reaction to them by consumers. Despite such corporate efforts and an expanding literature exploring consumers’ response to CSR, it remains unclear how consumers perceive CSR and which “Gestalt” consumers have in mind when considering CSR. Academics and managers lack a tool for measuring consumers’ perceptions of CSR. This research explores CPCSR and develops a measurement model. Based on qualitative data from interviews with managers and consumers, the (...) authors develop a conceptualization of CPCSR. Subsequently, model testing and validating occurs on three large quantitative data sets. The conceptualization and the measurement scale can assist companies to assess CPCSR relative to their performance. They also enable managers in identifying shortcomings in CSR engagement and/or communication. Finally, the paper discusses implications for marketing practice and future research. (shrink)

Two complete eBooks for one low price! Created and compiled by the publisher, this Philosophy & Ethics bundle brings together two important titles in one, e-only bundle. With this special bundle, you’ll get the complete text of the following two titles: _Philosophy For Dummies_ _Philosophy For Dummies_ is for anyone who has ever entertained a question about life and this world. In a conversational tone, the book's author – a modern-day scholar and lecturer – brings the greatest wisdom of the (...) past into the challenges that we face now. This refreshingly different guide explains philosophical fundamentals and explores some of the strangest and deepest questions ever posed to human beings, such as: How do we know anything? What does the word _good_ mean? Are we ever really free? Do human beings have souls? Is there life after death? Is there a God? Is happiness really possible in our world? _Ethics For Dummies_ An easy-to-grasp guide to addressing the principles of ethics and applying them to daily life How do you define "good" versus "evil?" Do you know the difference between moral "truth" and moral relativity? Whether or not you know Aristotle from Hume, _Ethics For Dummies_ will get you comfortable with the centuries-old study of ethical philosophy quickly and effectively! _Ethics For Dummies_ is a practical, friendly guide that takes the headache out of the often-confusing subject of ethics. In plain English, it examines the controversial facets of ethical thought, explores the problem of evil, demystifies the writings and theories of such great thinkers through the ages as Aristotle, Confucius, Descartes, Kant, Nietzsche, and so much more. You’ll learn how to apply the concepts and theories of ethical philosophy to your everyday life. Whether you're currently enrolled in an ethics course or are interested in living a good life but are vexed with ethical complexities_, Ethics For Dummies_ has you covered! About the Author of _Philosophy For Dummies_ Tom Morris, Ph.D., author of True Success and other books, taught philosophy at Notre Dame University for 15 years and currently heads the Morris Institute for Human Values. About the Authors of _Ethics For Dummies_ Christopher Panza, PhD, is an associate professor of philosophy at Drury University and coauthor of Existentialism For Dummies. Adam Potthast, PhD, is an assistant professor of philosophy at Missouri University of Science and Technology. (shrink)

Socially responsible investment is a rapidly emerging phenomenon within the field of personal investment. However, the factors that lead investors to choose socially responsible investment products are not well understood, especially in an Australian context. This study provides a comparative examination of conventional and socially responsible investors, with the aim of identifying such factors. A total of 55 conventional investors and 54 ethical investors participated in the study by completing mailed questionnaires about their investment and general behaviour and their attitudes (...) and beliefs. Results indicated some important differences between socially responsible and conventional investors in their beliefs of the importance of ethical issues, their investment decision-making style, and their perceptions of moral intensity. These results support the notion that socially responsible investors differ in critical ways to conventional investors, and are discussed in terms of theoretical and practical implications. (shrink)

In this study, we explore how investors reconcile information on firms’ social responsibility with analysts’ assessments of future firm risk in the pricing of long-term bonds. We ask whether investors pay attention to small strides toward and/or small slips away from socially responsible behavior, arguing that analysts’ corporate bias toward gains and against losses influences investor reactions to corporate social responsibility. We hypothesize that analysts notice and reward improvements in social responsibility, yet excuse lapses. We find support for this (...) hypothesis, using a unique dataset of long-term bonds that combines lagged measures of firm-level financial and social performance with bond-specific data pertaining to risk of default and pricing. The empirically robust asymmetry in investor responses to small but often cumulative increases versus decreases in corporate social responsibility reveals an under-examined root cause of longer-term, larger-scale distortions in financial market returns regarding corporate social performance. Our findings elaborate earlier behavioral research on how corporate bias influences analysts’ short-term assessments of economic risk, by theorizing why this corporate bias may influence long-term assessments of social risk. Our work also motivates more critical scrutiny of the role analysts play in revising the future risk of today’s social action versus inaction. (shrink)

This research investigates how consumers’ ethical brand perceptions are affected by differentially valenced information. Drawing on literature from person-perception formation and using a sequential, mixed method design comprising qualitative interviews and two experiments with a national representative population sample, our findings show that only when consumers perceive their judgment of a brand’s ethicality to be pertinent, do they process information holistically and in line with the configural model of impression formation. In this case, negative information functions as a diagnostic cue (...) to form an unethical brand perception, irrespective of other positive information at hand. However, in the case where processing relevance of the un/ethical information provided is low, brand perception formation is algebraic, in which case positive information can counterbalance and neutralize the detrimental impact of brand misbehavior. Our findings extend existing research on consumer perceived ethicality as well as consumer reactions to corporate social responsibility and sustainability initiatives, which has so far assumed the asymmetric impact of negative information on ethical perceptions and consumer attitudes to be prevalent. We derive a range of academic and managerial implications and present a number of important avenues for future research. (shrink)

The chapter considers the “paradox of fiction,” understood as the claim that it is in some sense irrational or inappropriate to respond emotionally to mere fictions. Several theorists have held that special features of imagination, or other “arational” mental reflexes, play a role in its resolution. I argue, to the contrary, that imagination need not enter into the solution, and that the paradox can be resolved in a way that shows our responses to fictions to be reasonable and warranted, even (...) if our emotional reactions to fiction are caused by beliefs and desires. Coming to terms with the paradox requires both properly understanding the “rug-pull” structure of the examples used to motivate it, and appreciating the specific emotional norms relevant to fiction appreciation. Related proposals by Livingston & Mele (1997) and Gilmore (2011) are discussed; their relevance to and coherence with the present account are explained. [This is Chapter 11 of Explaining Imagination.]. (shrink)

Over the years, researchers have enriched the postulation that hedonic products generate deeper emotional reactions and feelings in the consumer than functional products. However, recent research empirically proves that hedonic products are more affect-rich only for some consumers segments or for specific consumption contexts. We argue that such inconsistency may derive from the nature of the emotions assessed, that is strictly dependent on their empirical measurement, and not from the mere existence of emotions themselves. Self-reported methods of evaluating consumer (...) experience, on which prior studies are grounded, only assess conscious emotions the consumer can recognize and report, but not unconscious feelings, happening without individual awareness. The present work takes this challenge by conducting a laboratory experiment in which subjects are exposed to both a utilitarian product and a hedonic product. Physiological measures have been adopted to investigate unconscious emotional responses and self-reported measures to assess conscious emotions toward the products. Specifically, physiological data regarding the subjects' cardiac activity, respiratory activity, electrodermal activity, and cerebral activity have been collected and complemented with a survey. Results confirm that both functional and hedonic products generate emotional responses in consumers. Further, findings show that when a consumer is exposed to a functional product, the physiological emotional responses are disassociated from the self-reported ones. A diverse pattern is depicted for hedonic products. We suggest an alternative explanation for the apparent lack of affect-rich experiences elicited by functional products and the need to re-consider emotional responses for these products. (shrink)

We aim to investigate the effect of corporate environmental responsibility (CER) engagement on investors' reactions. We also explore heterogeneity of this impact among different types of companies and different company's market performance. We use panel data models and quantile regression based on data related to firms listed on the A-share China security market and the final sample consists of 3,776 firm-year observations. The results show that CER engagement has a significant positive impact on investors' investment decisions. Further, investors are (...) more sensitive to CER engagement of high energy-consumption companies and no matter the company is a state-owned or a non-state-owned, CER engagement has a significant positive impact on investors' reactions. CER engagement has a significant positive impact on investors' reactions in all quantiles except one and the promoting effect increases first and then decreases with the growth of corporate market value from lower to upper quantiles. (shrink)

Traditionally, civil law jurisdictions in Scandinavia and the continent of Europe have not been willing to acknowledge the appropriateness of extending bankruptcy relief to consumer debtors and discharging any part of their debts. The opposition was based on the importance of upholding the sanctity of contractual obligations: pacta sunt servanda. This attitude stood in contrast to the fresh start philosophy of US bankruptcy law, which embraced a more forgiving attitude, focusing on the reintegration of the insolvent debtor into society, substantially (...) free of debt, after he has filed for bankruptcy and surrendered his non-exempt property for distribution among his creditors. The relaxation of credit controls and the rapid increase in the number of insolvent debtors in the late 1980s and early 1990s has forced many continental jurisdictions to reconsider their traditional opposition. They have since adopted debt adjustment plans providing various forms of debt relief to overcommitted debtors but only a substantial number of years after the initial proceedings. The American reaction has gone in the opposite direction. With the adoption of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the United States has reversed its century old liberal fresh start tradition. The 2005 Act imposes a formidable means test as well as other preconditions to determine whether a debtor has sufficient discretionary income to pay off twenty percent of his or her unsecured debts under a Chapter 13 plan. If the answer is yes, the debtor is denied the right to file a bankruptcy petition under Chapter 7 of the Bankruptcy Code. This paper asks whether these developments on opposite sides of the Atlantic suggest that facts on the ground are more important than dogma and deeply entrenched beliefs. The author’s answer is that while there is certainly a trend towards convergence between continental European and US approaches to consumer insolvency, it is much too soon to speak of a common culture and a common approach. He notes, however, that Commonwealth jurisdictions have long adopted a means test to determine a debtor’s eligibility for discharge from debt and suggests that continental scholars would have done better to study the Commonwealth experience as embodying a suitable compromise than to flirt with the US fresh start philosophy, only to reject it as too alien to the continental moral sense. (shrink)

In this study, we conducted two experiments to examine the effect of relationship commitment on the reaction of shoppers to receiving too much change, controlling for the amount of excess change. Hypotheses based on equity theory, opportunism and guilt were set up and tested. The first study showed that, when the less committed consumer is confronted with a large excess of change, he/she is less likely to report this mistake, compared with a small excess. Conversely, consumers with a high commitment (...) towards the retailer are more likely to tell when they receive too much change, especially when the amount is large. The second experiment provided an explanation for these findings: the less committed consumer is driven by opportunism, whereas guilt-related feelings play an important role in a high commitment relationship. These results have several implications for both retail management and future research. (shrink)

This paper examines the market response to the events leading up to the passage of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act to explore whether investors value mandatory human rights disclosures of conflict mineral usage. Using a sample of 3639 US registrants from January 1, 2008 to September 30, 2014, we document a significant negative stock market reaction to the passage of the Act. Using a sample of 1206 filers, we also find a negative market (...) reaction to conflict mineral disclosures under the Act. The market reaction is more negative and limited to companies that source their minerals from the DRC and adjoining countries, companies with prior records of human rights violations, and companies with ambiguous disclosures. However, the market appears to reward firms that use risk-mitigation strategies. This paper provides preliminary evidence that the mandatory disclosure of conflict mineral information on Form SD poses a threat to firms’ legitimacy, resulting in a net cost to investors. The results of this study provide economic justification for companies with poor records of conflict mineral sourcing to improve their practices for the purpose of avoiding the high costs that will arise if they are forced to disclose human rights abuses related to conflict mineral use. (shrink)

In recent years, two competing methodological frameworks have developed in the study of the epistemology of philosophy. The traditional camp, led by experimental philosophy and its allies, has made inferences about the epistemology of philosophy based on the reactions, or intuitions, people have to works of philosophy. In contrast, multiple authors have followed the lead of Deutsch and Cappelen by setting aside experimental data in favor of inferences based on careful examination of the text of notable works of philosophy. (...) In other words, the debate is split between authors focusing on philosophy’sconsumptionand those focusing on philosophy’sproduction. This paper examines the motivation for focusing on original texts and other evidence of philosophy’s production and finds it lacking. Drawing upon Hills’ distinction between propagation and transmission, I argue that the social epistemology of philosophy does not justify the recent focus on original texts of philosophy. Because the philosophical knowledge of consumers of philosophy is likelyinspiredby producers of philosophy, as opposed to epistemically grounded in the producers’ epistemic states, experimental philosophy had it right all along—if we want to know the epistemic standing of philosophy, we need to look to philosophy’s consumers. (shrink)

Consumers are bombarded with labels and claims that are intended to address their concerns about how food products are produced, processed, and regulated. Among those are the natural or all-natural claims and the certified organic label. In this study, two focus groups were conducted to explore consumers’ attitudes toward all-natural and organic pork and to gather their reactions to the USDA organic standards for meat, and the policy for natural claims. Results indicated that participants had positive associations with the (...) terms “organic” and “all-natural” with exceptions regarding the trustworthiness of all-natural claims. Participants perceived the “no” labeling theme (no antibiotics, no hormones, no chemicals, etc.) often coupled with the all-natural label on pork products as identifying potential health and animal welfare risks. In response to the USDA standards and policies for labeling pork products as organic or all-natural, participants expressed confusion and had many unanswered questions. (shrink)

We tested whether the impact of an organizational transgression on consumer sentiment differs depending on whether the organization is a nonprofit. Competing hypotheses were tested: that people expect higher ethical standards from a nonprofit than a commercial organization, and so having this expectation violated generates a harsher response and that a nonprofit’s reputation as a moral entity buffers it against the negative consequences of transgressions. In three experiments participants were told that an organization had engaged in fraud, exploitation of women, (...) or unethical labor practices. Consistent with the moral disillusionment hypothesis, decreases in consumer trust post-transgression were greater when the organization was described as nonprofit, an effect that was mediated by expectancy violations. This drop in trust then flowed through to consumer intentions and consumer word of mouth intentions. No support was found for the moral insurance hypothesis. Results confirm that nonprofits are penalized more harshly than commercial organizations when they breach consumer trust. (shrink)

This article investigates whether investors consider the reliability of companies’ sustainability information when determining the companies’ market value. Specifically, we examine market reactions (in terms of abnormal returns) to events that increase the reliability of companies’ sustainability information but do not provide markets with additional sustainability information. Controlling for competing effects, we regard companies’ additions to an internationally important sustainability index as such events and consider possible determinants for market reactions. Our results suggest that first, investors take into (...) account the reliability of sustainability information when determining the market value of a company and second, the benefits of increased reliability of sustainability information vary cross-sectionally. More specifically, companies that carry higher risks for investors (e.g., higher systematic investment risk, higher financial leverage, and higher levels of opportunistic management behavior) react more strongly to an increase in the reliability of sustainability information. Finally, we show that the benefits of an increase in the reliability of sustainability information are higher in times of economic uncertainty (e.g., during economic downturns and generally high stock price volatilities). (shrink)

Over fifty years ago, Albert Hirschman argued that dissatisfied consumers could either voice complaint or exit when they were dissatisfied with goods or services. Loyal consumers would voice rather than exit. Hirschman argued that making exit easier from publicly provided services, such as health or education, would reduce voice, taking the richest and most articulate away and this would lead to the deterioration of public services. This book provides the first thorough empirical study of these ideas. Using a modified version (...) of Hirschman's account, examining private and collective voice, and viewing loyalty as a form of social investment, it is grounded on a dedicated five-year panel study of British citizens. Given government policies over the past decade or more which make exit easier from public providers, this is a timely publication for all those who care about the quality of government services. (shrink)

It is widely claimed that climate change has increased the magnitude and the frequency of natural phenomena such as storms, droughts, and floods with the concomitant costs in terms of damages and victims. This paper using weekly data from global stock market indices in a Fama–French model, examines how and to what extent market agents and investors react to such events. As a yardstick for comparison purposes, the possible market impact of industrial accidents is also incorporated and examined in the (...) empirical investigation. The study uses in a comparative approach the STOXX Global ESG Environmental Leaders index and the STOXX Global index diversified across 1800 top companies. Results reported herein seem to indicate that natural and anthropogenic adversity have no immediate impact on the stock indices, while wildfires have an immediate reduction impact on market risk in the case of the ESG Environmental Leaders index. Moreover, wildfires and industrial accidents appear to cause a significant reduction of systematic risk over the next week following the incident. However, the magnitude of the effect is higher in the case of the ESG Environmental Leaders stock index. Finally, the effect on systematic risk by industrial accidents is temporarily without any lasting imprint. (shrink)

We examine whether investors value the disclosure of first-time standalone corporate social responsibility reports, and whether market valuations differ between government-controlled and privately controlled firms. Using a matched sample of Chinese publicly listed firms, we find that CSR initiators have higher market valuations than matched CSR non-initiators, and CSR initiators controlled by the central and local governments have lower market valuations than CSR non-initiators and CSR initiators controlled by private shareholders. Additional analyses demonstrate that CSR initiators with high CSR reporting (...) quality and perceived credibility have higher market valuations than CSR initiators with low CSR reporting quality and medium or low perceived credibility of CSR reporting. We do not find convincing evidence that CSR mandate, litigation risk, and prior stock returns affect market reactions to CSR reporting. Overall, we find that the market values standalone CSR reports, and that CSR reporting quality and perceived credibility are important factors in market valuation. (shrink)

Inappropriate social interactions of entrepreneurs can generate negative effects in the peer-to-peer lending market. To address this problem and assist peer-to-peer entrepreneurs in customizing their online interaction strategies, we used the cutting-edge cognitive-experiential self-system conceptual model and studied the relationship between peer-to-peer entrepreneurs’ interactions and financing levels. Online interactive information was categorized as emotional or cognitive, adding the moderator of entrepreneur popularity, and the effect of these interactions on individual investors was analyzed. We found that the entrepreneurs’ online interactive information (...) affected psychological perception of entrepreneurs and their corresponding brand image. The interaction between popularity and interactive information types was significant. The findings imply that less popular entrepreneurs should engage in emotional interactions, while more popular entrepreneurs should choose cognitive interactions. Online interaction created comparative advantages in the financing activities of peer-to-peer companies. These results expand understanding of the psychological facets of the consumer–brand relationship in the digital world, and extend the current literature. This study also highlights key areas of learning and application for both practitioners and scholars of organizational psychology. (shrink)

This paper investigates the short-term effects on the price of the ethically screened stocks of the Dow Jones Islamic Market World Index quarterly revisions. Using a sample of 8250 stocks from May 1999 through June 2012, we find a significant price reaction of the ethically screened stocks following additions and deletions. The results show that additions from emerging stock markets tend to experience a greater and significantly positive price response than additions from the developed markets. Further tests reveal that the (...) price reactions following DJIMWI revisions are likely to be driven by shifts in investor sentiment rather than changes in firm fundamentals. (shrink)

Previous behavioral research on advertising deception has focused on the extent to which consumers would be misled by claims and implications of advertisements. The present research examines the effect of an important, but largely neglected, dimension: the severity of anticipated harm as a result of being deceived. Two experiments disentangle the effect of anticipated harm on consumer brand attitudes and purchase intentions from that of perceived deception. Interestingly, greater harmfulness increases diagnosticity of perceived deception, which partially accounts for consumers’ negative (...) reactions to deceptive advertising. Theoretical, methodological, and ethical implications are discussed. (shrink)

We examine whether an unsophisticated investor’s own gender interacts with gender of a sell-side equity analyst to affect the investor’s judgment. Prior research shows two potential sources of gender-based discrimination that affect female investors. First, female investors’ advisors offer less risky hence lower return portfolios to female investors than to male investors with similar risk preferences as female investors are perceived as more risk adverse. Second, female equity analysts are subject to greater barriers to enter and advance in investment firms (...) that act as if they believe clients prefer male investment advisors in a male stereotypical occupation. Using two experiments, we use the judge-advisor framework to predict and find that investor’s gender and analyst’s gender jointly influence investor’s judgment. Specifically, female-female analyst-investor pair generates the strongest reaction to analyst’s advice compared to any other analyst-investor pair, everything else equal. Further, we find that efforts to highlight equal gender performance activates gender stereotypes that reduce female investors’ receptivity to female analysts’ advice. By linking the two previously different sources of discrimination we show that they reinforce each other and find that attempts to “level the playing field” by emphasizing gender performance parity may have unexpected results. (shrink)

The social banking market constitutes a small but rapidly growing submarket of the global banking sector. Due to an explicit commitment to sustainability, social banking is a segment of banking services which is not exclusively focused on economic performance criteria, but pursues ecological and social goal dimensions on an equal footing. Information on the number and reachability of potential social banking customers is essential for social banks to further promote sustainable consumption in finance. In scientific research, social banking is considered (...) a relatively new field, still lacking empirical analyses regarding the market size and specific consumer behaviour. This study addresses the research gap by generating first insights into the German social banking market. Based on an online survey using an adaptive conjoint analysis, a large data set covering 3537 respondents was compiled. Sample 1 comprises 2896 respondents who are customers of three major social banks in Germany. Sample 2 covers the remaining 641 respondents who represent the German adult population and exclusively buy from conventional banks. Logistic regression modelling reveals that social banking customers differ significantly from their conventional counterparts regarding several socio-demographic, behavioural and psychographic factors. In comparison with conventional banking customers, social banking customers tend to be younger, higher educated and located in larger places of residence. Contrary to existing research on socially responsible investors, they are male to a higher proportion than female. Moreover, social banking customers demonstrate stronger sustainable buying patterns and weaker preferences for financial, but stronger preferences for social return than conventional banking customers. The results further indicate a considerable untapped growth potential for social banks by uncovering a market size ranging between 10 and 26% of the German adult population. Finally, suggestions for marketing strategies and future research are given. (shrink)

Based on the assumption that consumers will reward firms for their support of social programs, many organizations have adopted corporate social responsibility (CSR) practices. Drawing on social identity theory, a model of influence of CSR on loyalty is developed and tested using a sample of real consumers. Results demonstrate that CSR initiatives are linked to stronger loyalty both because the consumer develops a more positive company evaluation, and because one identifies more strongly with the company. Moreover, identity salience is shown (...) to play a crucial role in the influence of CSR initiatives on consumer loyalty when this influence occurs through consumer-company identification. A strong identifier is not necessarily in a constant state of salience, but activating identity salience of a particular consumer social identity (a company) will affect consumer reactions to product stimuli, increasing consumer loyalty. (shrink)