This paper considers the financial optimization problem of a firm with several sub-businesses striving for its optimal RORAC. An insightful example shows that the implementation of classical gradient capital allocation can be suboptimal if division managers are allowed to venture into all...

We study the relationship of corporate social responsibility (CSR) and the distribution of stock returns for an international sample. Firms with a high level of CSR generally exhibit superior stock price synchronicity in the markets of Europe, Japan, and the United States. In particular, we...

We investigate the relationship between corporate social performance and litigation risk by examining US class action lawsuits. We find that a one standard deviation improvement in environmental, social, and governance (ESG) controversies of an average sample firm reduces litigation risk from...