Do CSR awards enhance firms' market value? Evidence from China.

Purpose: This study aims to examine the impact of corporate social responsibility (CSR) awards on firms' market value considering these awards as a signal and proxy for the effectiveness of CSR practice. Design/methodology/approach: There are 342 announcements of CSR awards in China from 2006 to 2017 screened and analyzed using the event study methodology. Findings: The stock market reacts significantly negatively to CSR award announcements in the short term. Firms that are state-owned, belong to the manufacturing industry, outside east China, repeatedly win awards and are listed in the Chinese H-share market, experience a stronger stock market reaction. Interestingly, the long-term stock returns of award winners are significantly positive for multiyear holding periods. Practical implications: The findings offer stakeholders clear guidelines on how to manage communications in the market to extract enhanced financial performance from CSR award announcements. Originality/value: This study chooses CSR awards as a proxy for the effectiveness of excellent CSR practice. This study also contributes to the CSR literature by analyzing how investors use the award information to make investment decisions. [ABSTRACT FROM AUTHOR]