Economic Consequences of Accounting Enforcement Actions

This study examines what characteristics of firms may result in higher performance in corporate social responsibility (CSR) and whether the level of a firm’s CSR gives meaningful effects on the firms value or not. Main results are as follows. Firstly, ownership structure, the size, debt ratio, the profitability and the age effect on the firm’s level of CSR significantly. Also, the fact that a company belongs to a Jaebul group gives effects on the level of CSR. The higher the equity ratio of major shareholder, the higher the level of CSR. And, the size, debt ratio and the age of companies have negative effects. The higher debt ratio gives positive effects on the level of CSR. Secondly, the analysis on how the level of CSR effects on the firm value shows that the value of the 200 companies of KEJI is lower than that of other companies generally. But, the result shows that the higher the level of CSR causes the higher firm value in the group of KEJI 200. This means that the assessment of the capital market on CSR is not positive in general, but affirmative only in the group of 200 companies of KEJI.