Economic policy uncertainty and corporate donation: evidence from private firms in Korea

This study examines the association between economic policy uncertainty (EPU) and private firms' corporate donations. Based on resource constraints and the conservation of resources (COR) theory, we argue that private firms are constantly facing resource constraints and their resource conservation motive becomes apparent when EPU is heightened. Therefore, we expect that corporate donations are negatively related to EPU. Using audited corporate donations from 48,903 private firms in Korea during 2002–2019, we find that private firms' donations are negatively related to EPU. We find that private firms operating in more competitive conditions increase their donations, but this positive association between market competition and donations is moderated by EPU. We find that private firms' donations increased when the progressive party is in power, but this positive relationship is also moderated by EPU. Our results suggest that firms reduce their level of corporate giving to conserve resources as a precautionary saving motive when they face higher EPU. Our paper contributes to the strand of literature on corporate donations and EPU by providing evidence that EPU significantly affects private firms' donations. We also find that firms' strategic motives and political pressure to engage in corporate donations are moderated by EPU.

Did ESG Save the Day? Evidence From India During the COVID-19 Crisis

Investors have shown increasing interest in Socially Responsible Investments (SRI) in the past few years, especially during the financial crisis caused due to the outbreak of the COVID-19 pandemic. SRI are evaluated on the basis of Environmental, Social and Governance (ESG) criteria. ESG information allows investors to assess the risks associated with a particular firm and how the firm manages or intends to manage future risks. Amidst the increasing investor interest in ESG products, we attempt to study the value addition of ESG performance to investors during crisis period. Using a sample of ESG rated firms listed on the Bombay Stock Exchange (BSE), we examine the investment performance, trading volumes and return volatility of ESG stocks in an emerging market like India during the COVID-19 crisis. The results of our event study conducted around the important events that have occurred in India during the COVID-19 pandemic provide evidence that investors can use ESG information as a signal of future stock performance. Most importantly, ESG performance provides downside protection during crisis times. Our results show that ESG performance does not prove to be detrimental to investment performance during normal times. Also, ESG performance was found to reduce stock return volatility during the COVID-19 pandemic. Overall, our study attempts to establish an investment case for ESG stocks in emerging markets in India by providing support to the good management hypothesis.

Organizational readiness and innovation in the Jordanian telecommunication companies

Purpose The purpose of this study is to examine the effect of organizational readiness (OR) dimensions (organizational culture, climate and capability) on three types of innovations (INs) (service, process IN and entering new markets) in telecommunication companies. The study also tests the mediating role of employee engagement (EE) in the causal relationship between OR and IN. Design/methodology/approach In the theoretical framework, a deep and broad review of the literature was presented to determine the study variables and hypotheses that were tested in the field study. The study sample consisted of 306 respondents distributed to the headquarters of the three companies (Zain, Orange and Umniah) working in the Jordanian telecommunications sector. The number of questionnaires retrieved and valid for analysis was 255 (83%). Findings Results indicate a positive effect of organizational climate and organizational capacity on process IN and entering new markets. While organizational culture had no significant effect on the three types of IN EE did not have a mediating role in the relationship between OR and IN. Research limitations/implications The results of this study are related to the telecommunications sector as a highly competitive service sector and more able to work remotely with regard to customers, so its results cannot be generalized to other sectors such as the industry sector, which has suffered in recent years from the epidemic more than other sectors. Practical implications The study of OR as a concept, dimensions and effects provides great experience for leaders and managers facing the challenges of competition and threats posed by the Covid-19 pandemic. This study also helps researchers to study OR in new areas and in relation to other concepts. Social implications The OR covers a wide field that includes the individual, the group and the company. Therefore, readiness includes a social experience that can extend from the company to the community. Originality/value The study gains an important value by revealing that organizational culture as a dimension of readiness does not have a significant impact on IN. With the readiness to respond quickly to challenges, culture can be more inclined to the status quo and the prevailing routine than to IN and change.

Are ESG stocks safe-haven during COVID-19?

Purpose The purpose of this study is to investigate safe-haven properties of environmental, social and governance (ESG) stocks in global and emerging ESG stock markets during the times of COVID-19 so that portfolio managers and equity market investors could decide to use ESG stocks in their portfolio hedging strategies during times of health and market crisis similar to COVID-19 pandemic. Design/methodology/approach The study uses a wavelet coherence framework on four major ESG stock indices from global and emerging stock markets, and two proxies of COVID-19 fear over the period from 5 February 2020 to 18 March 2021. Findings The results of the study show a positive co-movement of the global COVID-19 fear index (GFI) with ESG stock indices on the frequency band of 32 to 64 days, which confirms hedging and safe-haven properties of ESG stocks using the health fear proxy of COVID-19. However, the relationship between all indices and GFI is mixed and inconclusive on a frequency of 0-8 days. Further, the findings do not support the safe-haven characteristics of ESG indices using the market fear proxy (IDEMV index) of COVID-19. The robustness analysis using the CBOE VIX as a proxy of market fear supports that ESG indices do not possess safe-haven properties. The results of the study conclude that the safe-haven properties of ESG indices during the ongoing COVID-19 pandemic is contingent upon the proxy of COVID-19 fear. Practical implications The findings have important implications for the equity investors and assetty managers to improve their portfolio performance by including ESG stocks in their portfolio choice during the COVID-19 pandemic and similar health crisis. However, their investment decisions could be affected by the choice of COVID-19 proxy. Originality/value The authors believe in the originality of the paper due to following reasons. First, to the best of the knowledge, this is the first study investigating the safe-haven properties of ESG stocks. Second, the authors use both health fear (GFI) and market fear (IDEMV index) proxies of COVID-19 to compare whether safe-haven properties are characterized by health fear or market fear due to COVID-19. Finally, the authors use the wavelet coherency framework, which not only takes both time and frequency dimensions of the data into account but also remains unaffected by data stationarity and size issues.