Innovator Article

Socially Responsible Corporations with Heavy PAC Contributors Associated with Higher Stock Returns

Image of Socially Responsible Corporations with Heavy PAC Contributors Associated with Higher Stock Returns

Companies, labor unions and other organizations spend billions each year to lobby Congress and federal agencies, often resulting in business- and tax-friendly decisions. But what about company managers who give as individuals to efforts to influence policy or elections?

In a new study, Professor Paul Griffin found that public companies that tout social responsibility and whose managers contribute to political action committees tend to provide higher returns to shareholders.

“Especially for smaller public companies, if the firm has been active in disclosing corporate social responsibility measures and if the individuals in the company are politically active, there’s a good chance you will do better in the stock market if you invest in that company,” says Griffin.

Griffin and co-author Yuan Sun, a doctoral candidate at UC Berkeley’s Haas School, analyzed extensive data on voluntary corporate social responsibility disclosures, campaign contributions and stock performance. Their paper, “Strange Bedfellows? Voluntary CSR Disclosure and Politics,” will be published in the journal Accounting & Finance.

They found that companies were more likely to make social responsibility disclosures if they were headquartered in a “blue state,” or one that traditionally has voted Democratic. “We hypothesized that if a state where a corporation is located is blue, on balance, the customers, the suppliers, and even the shareholders have that same tendency to be blue,” Griffin says.

Griffin and Sun determined that companies that issue more press releases on CSRwire, an online news service that publishes reports issued by member organizations on issues related to sustainability and CSR, tend to have more management employees who contribute to political action committees. The correlation was strongest with individuals who donated to political action committees affiliated with the Democratic Party.

Additionally, the stock market reacted favorably when corporations posted news releases on CSRwire. The market effect intensified if managers also made contributions to political action committees. “The effects on stock values of CSRwire releases are immediate and can continue for up to three months after the disclosure,” Griffin says.

He cautions that while the correlations are strong, researchers need to look more closely at the underlying pathways whereby CSR disclosure and political contributions combine to produce shareholder gains.

Griffin was recently named a Fellow of the New Zealand Institute of Chartered Accountants, which honored him for distinction, excellence and service to the accountancy profession in New Zealand.

Commands

Twitter Feed

Loading tweets...
News Release

UC Davis Part-Time MBA Ranked in Nation’s Top 9%
Fourth Consecutive Year among U.S News & World Report's Premier Programs

Image of UC Davis Part-Time MBA Ranked in Nation’s Top 9%

(Davis, CA) — The UC Davis Part-Time MBA program offered in Sacramento and the San Francisco Bay Area is ranked among the top 9% in the U.S., according to U.S. News & World Report’s latest graduate business school rankings.

At No. 29, this is the fourth consecutive year the UC Davis Part-Time MBA program is among the top AACSB International-accredited part-time MBA programs surveyed. This year, there were 323 part-time MBA programs surveyed.

News Release

UC Davis Full-Time MBA Ranked among Nation’s Premier Programs for 20th Consecutive Year
MBA Programs among Top 10% in U.S.
Record Salary and Bonus

Image of UC Davis Full-Time MBA Ranked among Nation’s Premier Programs for 20th Consecutive Year

(Davis, CA) — The UC Davis Graduate School of Management’s Full-Time MBA program is ranked among the premier business schools in the nation for the 20th consecutive year, according to U.S. News & World Report’s latest graduate business school rankings released today.

U.S. News’ latest ranking places the Full-Time MBA program at No. 48, placing it among the top 10% of the 464 Association to Advance Collegiate Schools of Business International’s accredited full-time MBA programs surveyed.

Key statistics from the School’s Full-Time MBA ranking include:

News Release

UC Davis Graduate School of Management partners with Lawrence Livermore and Sandia National Labs to drive technologies from lab to market

Image of UC Davis Graduate School of Management partners with Lawrence Livermore and Sandia National Labs to drive technologies from lab to market

(Davis, Calif.) – With a joint goal of speeding the transfer of new technologies from the laboratory to the commercial marketplace, the UC Davis Graduate School of Management, Lawrence Livermore National Laboratory and Sandia National Laboratories have announced a new partnership for researchers to develop their entrepreneurial skills.

Spotlight Story

Vickie Sherman MBA 13 Finds Her Passion, Her Career—and Herself

Image of Vickie Sherman MBA 13 Finds Her Passion, Her Career—and Herself

What opportunities, decisions, events have shaped your professional life?

My career path has been a climb across a jungle gym rather than a tangent up a corporate ladder. As a child, I used to thumb through the three-inch JCPenney catalogue, picking out the professional women who I would grow to be. I wanted to rule the world from a corner office in a suit and heels. I wanted to shed my humble origins and become Corporate Barbie.

Spotlight Story

MBA Student Consultants Make an IMPACT
Projects Put Business Needs Front and Center

Image of MBA Student Consultants Make an IMPACT

Agilent Technologies’ Electronic Measurement Group is a $3.6 billion business that over the past decade has seen a dramatic shift in its customer base from U.S., and Western European customers to predominantly Asia-based customers. Today, the majority of the division’s revenues are generated outside of the U.S., with an increasing concentration in China.