The Value of Names - Civil Society, Information, and Governing Multinationals on the Global Periphery
64 Pages Posted: 28 Feb 2021 Last revised: 29 Jul 2021
Date Written: December 24, 2020
Globally, civil society plays a crucial role in governance where laws and authority are weak. Increasingly, multinationals operate in these complex environments. We study how a key strategy of international civil society—disseminating information about human rights abuse—impacts multinationals. To do so, we focus on trend at the center interna- tional campaigns: the assassination of activists, and collect 20 years of murders related to the global mining sector. Using event study methodology, we estimate the impact human rights reporting on the stock price of firms connected to events. We find that the effect of the human rights spotlight is substantial. Firms named in assassination coverage have large, persistent, negative abnormal returns following assassinations. We calculate a median loss in market capitalisation of 100 million USD. We show media plays a crucial role; the negative impact of assassinations are strongest when they coincide with calm news cycles versus peak news cycles, when they may be crowded out by large, international stories. In addition, we argue our results are driven by events where companies are explicitly named in the reporting. Last, we show activist assassinations are positively related to the royalties paid by mining projects to domestic governments.
Keywords: Event Study, Civil Society, Governance, Human Rights, Conflict
JEL Classification: O16, O17, D74, G3
Suggested Citation: Suggested Citation