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Asymmetric Information and International Corporate Social Responsibility


  • Kerstin Lopatta

    () (University of Oldenburg - Accounting and Corporate Governance & ZenTra)

  • Frerich Buchholz

    () (University of Oldenburg - Accounting and Corporate Governance)

  • Thomas Kaspereit

    () (University of Oldenburg - Accounting and Corporate Governance)


We investigate the relation between asymmetric information of insider trades and international corporate social responsibility for U.S. firms listed in the MSCI world index during the period 2004 to 2010. In comparison to current studies, which focus on measuring the interrelation between the cost of capital or firm value and corporate sustainability, our analysis entails the direct relationship between international corporate sustainability and information asymmetry. We measure information asymmetry by the abnormal returns that occur when insiders trade in the stock of their firms. Hence, our investigation is based on a micro level and helps to explain the results at the more aggregated level of cost of capital, and at the fully aggregated level of firm value. In our cross-sectional analysis we found evidence that firms with a higher degree of corporate sustainability spend more efforts in reducing information asymmetry.

Suggested Citation

  • Kerstin Lopatta & Frerich Buchholz & Thomas Kaspereit, 2014. "Asymmetric Information and International Corporate Social Responsibility," ZenTra Working Papers in Transnational Studies 29 / 2014, ZenTra - Center for Transnational Studies, revised Jan 2014.
  • Handle: RePEc:zen:wpaper:29

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    References listed on IDEAS

    1. Bernanke, Ben S. & Mihov, Ilian, 1997. "What does the Bundesbank target?," European Economic Review, Elsevier, vol. 41(6), pages 1025-1053, June.
    2. Hans-Werner Sinn, 2009. "Can Germany Be Saved?: The Malaise of the World's First Welfare State," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262512602, January.
    3. Dennis J. Snower & Alessio J. G. Brown & Christian Merkl, 2009. "Globalization and the Welfare State: A Review of Hans-Werner Sinn's Can Germany Be Saved?," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 136-158, March.
    4. Dornbusch, Rudiger, 1993. "The End of the German Miracle," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 881-885, June.
    5. Hagemann, Harald, 2005. "Dismissal, Expulsion, and Emigration of German-Speaking Economists after 1933," Journal of the History of Economic Thought, Cambridge University Press, vol. 27(04), pages 405-420, December.
    6. Hans-Werner Sinn, 2006. "The Pathological Export Boom and the Bazaar Effect: How to Solve the German Puzzle," The World Economy, Wiley Blackwell, vol. 29(9), pages 1157-1175, September.
    7. Luigi Bonatti & Andrea Fracasso, 2013. "The German Model and the European Crisis," Journal of Common Market Studies, Wiley Blackwell, vol. 51(6), pages 1023-1039, November.
    8. Isabell Koske & Andreas Wörgötter, 2010. "Germany's Growth Potential, Structural Reforms and Global Imbalances," OECD Economics Department Working Papers 780, OECD Publishing.
    9. Gustav Horn & Simon Sturn & Till Treeck, 2010. "Die Debatte um die deutsche Exportorientierung," Wirtschaftsdienst, Springer;German National Library of Economics, vol. 90(1), pages 22-28, January.
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    More about this item


    Asymmetric Information; Corporate Governance; International Corporate Social Responsibility; Cross-Sectional Analysis; Event Study; Insider Trading;

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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