Corporate Social Performance, Analyst Stock Recommendations, and Firm Future Returns

By Xueming Luo, Heli Wang, Sascha Raithel, Qinqin Zheng. 2015

499 citations recorded by the source corpus.

As consumers spend more time on their mobile devices, a focal retailer’s natural approach is to target potential customers in close proximity to its own location. Yet focal (own) location targeting may cannibalize profits on inframarginal sales. This study demonstrates the effectiveness of competitive locational targeting, the practice of promoting to consumers near a competitor’s location. The analysis is based on a randomized field experiment in which mobile promotions were sent to customers at three similar shopping areas (competitive, focal, and benchmark locations). The results show that competitive locational targeting can take advantage of heightened demand that a focal retailer would not otherwise capture. Competitive locational targeting produced increasing returns to promotional discount depth, whereas targeting the focal location produced decreasing returns to deep discounts, indicating saturation effects and profit cannibalization. These findings are important for marketers, who can use competitive locational targeting to generate incremental sales without cannibalizing profits. Although the experiment focuses on the effects of unilateral promotions, it represents an initial step in understanding the competitive implications of mobile marketing technologies.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/d237dfb2005926892a5cc483df9572ff98ba5ea4

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Citations in the corpus

Country-level institutions, firm value, and the role of corporate social responsibility initiatives (2017, methodology): “Following previous studies (e.g., Ioannou & Serafeim, 2012; Luo et al., 2015), we capture a firm’s overall CSR performance score (CSR_P) as the average of its environmental performance score and social performance score.”
Unraveling the effects of environmental outcomes and processes on financial performance: A non-linear approach (2014, result): “The Asset4 scores have been used in other studies (Cheng et al., 2014; Ioannou and Serafeim, 2012; Luo et al., 2014).”
The Effect of Environmental, Social and Governance Consistency on Economic Results (2016, methodology): “According other studies [14,44], the industry is defined by Standard Industrial Classification (SIC) codes.”
Building innovation capability: The role of top management innovativeness and relative-exploration orientation (2017, unknown): “Second, to rule out reverse causality between financial performance and REO/TMI, following the process outlined by Luo et al. (2015), we performed the Granger causality test (Granger, 1969) with two lags.”
Does Corporate Social Responsibility Affect Information Asymmetry? (2016, background): “Sixth, other parties, who are found to be more drawn to CSR-engaging firms, provide additional information that can improve the reputation of a firm (Shane and Spicer 1983; Ioannou and Serafeim 2014; Luo et al. 2014).”
The Signaling Effect of Corporate Social Responsibility in Emerging Economies (2016, background): “Nowadays, investors and financial analysts also pay attention to corporate social behavior (Doh et al. 2010; Luo et al. 2014).”
A Behavioral Theory of Social Performance: Social Identity and Stakeholder Expectations (2017, background): “…by membership in social categories or 1 A notable exception is the negotiation of financial performance expectations with analysts (Bromiley, 1991; Luo et al., 2015) or auditors (Bame-Aldred & Kida, 2007). groups, including, among others, nationality, sports teams, or religious affiliation…”
Revisiting the corporate social performance‐financial performance link: A replication of waddock and graves (2016, background): “…to measure CSP. Recent studies continue to use KLD ratings to measure CSP (e.g., Jayachandran, Kalaignanam, and Eilert, 2013; Koh et al., 2014; Luo et al., 2015; Ramchander, Schwebach, and Staking, 2012), despite the ongoing debate on whether KLD ratings are good measures of CSP (Chatterji,…”
Corporate Social Responsibility and Firm Financial Performance: The Mediating Role of Productivity (2016, background): “Despite the abundant empirical evidence on the CSP–CFP relationship (Margolis and Walsh 2003; Orlitzky et al. 2003), the underlying mechanisms through which CSR engagement affects firm financial performance are not well understood (Luo et al. 2015).”
Analyzing Analyst Research: A Review of Past Coverage and Recommendations for Future Research (2018, background): “Thus, analysts may provide an “informational pathway connecting social performance to firm stock return” (Luo et al., 2015: 124).”