• The Journal of Asian Finance, Economics and Business
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• v.7 no.10
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• pp.95-107
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• 2020

This study analyzes the effect of corporate social responsibility (CSR) activity on investors' heterogeneous beliefs. The hypothesis of this study is based on the conflicting effects of CSR activities on firm value and earning's quality. Investors' heterogeneous beliefs used in the empirical analysis of this study are trading volume, and CSR activity is measured by the KEJI Index (Korea Economic Justice Institute Index). This study performs an empirical analysis using regression analysis including control variables. CSR activities are found to have a positive relationship with trading volume. This is consistent regardless of the low and high accounting information (earning's quality). It can be interpreted that Korea's CSR activity acts as an incentive to increase investors' heterogeneous beliefs about target companies. In other words, it implies that the investor judges CSR activities negatively when evaluating firm value. This study could have a policy implication in that it analyzes how CSR activities affect investors' decision-making. In other words, this study analyzed CSR activities from the perspective of shareholders. Therefore, this study is expected to provide useful information for policymaking by regulatory agencies. In particular, its contribution is to presents data that CSR activities can be a negative factor in evaluating firm values.

• Korea Trade Review
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• v.42 no.2
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• pp.227-249
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• 2017

This study investigates whether foreign equity ownership is associated with trading volume. This study establishes null hypothesis indicating that foreign equity ownership is not related to trading volume based on prior studies regarding foreign equity ownership. We measured trading volume as proxy of investors' heterogeneous beliefs. To exam The the hypothesis, we collected sample firms listed on the Korean Stock Exchange from the year of 2001 to the year of 2011 inclusively. Controlling for variables related with trading volume as reported in the previous studies, the regression coefficient for the foreign equity ownership showed statistically significant negative sign. These results indicate that the foreign equity ownership is negatively associated with investors' heterogeneous beliefs. This study contributes to extant literature on foreign equity ownership by providing evidence that foreign equity ownership affects investors' trading decisions. The results also help policy makers in their policy development.