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Centre for Building Sustainable Value

Soolim Park

George Washington University, United States

CSiR karma: The stock market reaction to a “bad” firm when an irresponsible issue arises



How do shareholders evaluate a firm with an irresponsible event such as product recall? This study tries to understand whether the stock market reaction to a product-related irresponsible issue varies depending on the firm's previous overall CSiR and domain-specific CSR and CSiR activities. By analyzing 271 product-related irresponsible events of S&P 500 firms from 2003 to 2018, this study indicates that a firm’s overall CSiR is statistically negatively related to the stock market reaction to a product-related irresponsible event. However, a firm's overall CSR is not positively associated with the stock market reaction. Subsample analyses suggest that a firm's product domain-specific CSR may mitigate the negative relationship between the overall CSiR and the stock market reaction based on the insurance effect. Also, the punishment effect of overall CSiR is less harmful when stakeholders may be barely surprised when an additional irresponsible event occurs to a “bad” product quality management firm.


I am a doctoral student in the Strategic Management and Public Policy department of the George Washington University School of Business. Before joining GW in 2019, I studied business administration at Korea University. I went for an exchange student at Copenhagen Business School in Denmark and Aston University in the U.K. I did a master's at Rice University in the U.S.

My research interests are organizational misconduct, corporate social responsibility/irresponsibility, and stakeholder management. I am generally interested in adverse events such as organizational misconduct and how organizations deal with these negative events. Corporate social responsibility, irresponsibility, and relationships with stakeholders may explain the consequences of organizational misconduct. Empirically, I am working on the short-term effect of adverse events in terms of stock market reactions. I am also interested in the long-term consequences of adverse events, such as organizational resilience.


Soolim Park

Soolim Park