from LexisNexis (see Appendix 3 and 4). Furthermore, the similarity of event classifications presented by the ASSET4 dataset necessitated a reduction in the total number of event types to 20 categories from over 30; EVENT 1= ‘management compensation’; EVENT 2 = ‘shareholder rights’; EVENT 3 = ‘earnings restatements’; EVENT 4 = ‘insider trading’; EVENT 5 = ‘accounting controversies’; EVENT 6 = ‘consumer-related issues’; EVENT 7 = ‘product and service quality’; EVENT 8 = ‘environmental spills and pollution’; EVENT 9 = ‘product recalls’; EVENT 10 = ‘intellectual property’; EVENT 11 = ‘public health’; EVENT 12 = ‘taxation’; EVENT 13 = ‘anti- competition’; EVENT 14 = ‘human rights’; EVENT 15 = ‘child labour’; EVENT 16 = ‘freedom of association’; EVENT 17 = ‘diversity and opportunity’; EVENT 18 = ‘wages and working conditions’; EVENT 19 = ‘employee health and safety’; and EVENT 20 = ‘ethics.
Next, the resulting articles of the media search were utilised to compile more specific
information about each event. The articles were coded to reflect the underlying nature of
events, including the broad types of associated stakeholder harms (‘financial’, ‘physical’,
‘emotional’, ‘civil liberties’, ‘environmental’); specific types of stakeholder harms (‘injuries’,
‘fatalities’, ‘deception’, ‘discrimination’, ‘job losses’); and event characteristics such as whether the corporate irresponsibility event was desired by the firm (‘effect undesirability’), whether the firms was perceived as responsible for the events (‘culpability’) and whether the party affected by the firm’s actions was perceived as particularly vulnerable (‘affected party non-complicity’). Following these searches, the total number of usable observations in the regression models is
N=1,311.
With regards to the variable specifics such as; how they are measured and what they measure, I describe each variable here in more detail:
(3) I use the variable ‘ANY_EVENT’ to measure all identified acts of corporate irresponsibility per firm year without initially distinguishing between the different types of acts of irresponsibility. This is a dichotomous variable that takes the value of ‘1’ if the firm has been associated with corporate irresponsibility events in general in a given year and ‘0’ otherwise.
(4-23) The variables ‘EVENT_1’ …. ‘EVENT_20’ measure whether specific types of acts of irresponsibility affect corporate reputation. These classifications of corporate irresponsibility events describe the types of incidents that the observation most closely conforms to and are as
follows: (4) EVENT 1= ‘management compensation’, refers to incidents which pertain to the
perception of wrongdoing regarding management incentives and remuneration; (5) EVENT 2 =
‘shareholder rights’, refers to events that undermine stockholders’ abilities to exercise their
legal rights regarding various business activities; (6) EVENT 3 = ‘earnings restatements’,
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earnings; (7) EVENT 4 = ‘insider trading’, refers to events where actors related to the firm use
confidential knowledge to exploit the stock market; (8) EVENT 5 = ‘accounting controversies’,
describes events whereby a firm’s accounts have been manipulated, tampered or faulted; (9)
EVENT 6 = ‘consumer-related issues’, describes the various contexts whereby consumers are
harmed by a firm’s behaviour and not as a direct result of a product quality issue; (10) EVENT 7
= ‘product and service quality’, this specific classification of irresponsibility refers to incidents whereby a firm’s products or services directly harm stakeholders as a result of potential quality
issues; (11) EVENT 8 = ‘environmental spills and pollution’, describes events resulting in the
detriment of the wider natural world including air, sea and land as well as any other natural
resources; (12) EVENT 9 = ‘product recalls’, illustrates events whereby a firm, either
voluntarily or involuntarily, removes their product from the market and/or requires customers to return their goods; (13) EVENT 10 = ‘intellectual property’, refers to a certain category of events whereby the protected intangible property of a firm is claimed to be utilised by another
without consent; (14) EVENT 11 = ‘public health’, describes a class of non-consumer related
health impacts associated with organisational behaviour; (15) EVENT 12 = ‘taxation’, refers to a
class of events whereby the focal firm is associated with tax irregularities; (16) EVENT 13 = ‘anti-competition’ events describe the association with a set of illegal business practices
motivated to reduce competition in the marketplace; (17) EVENT 14 = ‘human rights’,
describes events which undermine the basic access to certain resources and fairness of treatment of individuals; (18) EVENT 15 = ‘child labour’ refers to the illegal practice of employment of individuals under the legal age, yet may also include moral judgements of age
appropriateness when the host government lacks an adequate requirement; (19) EVENT 16 =
‘freedom of association’ events describe those which undermine employees’ access to join
representative bodies such as unions; (20) EVENT 17 = ‘diversity and opportunity’ refers
specifically to events which employ discriminatory business practices that challenge
stakeholders’ abilities to gain access to resources or fair treatment; (21) EVENT 18 = ‘wages
and working conditions’ events describe non-health related incidents that undermine
employee access to resources or fair treatment; (22) EVENT 19 = ‘employee health and
safety’ events refer to incidents with actual or potential outcomes to employee health; and
finally, (23) EVENT 20 = ‘ethics’ is a more general category of corporate irresponsibility events
that do not to conform to the categories previously described. Another interesting aspect related to the “ethics” category is that it sits uneasy with stakeholder assessments of morality yet events of breaking ethical norms are not known to breach any explicit or extant legal parameters. These event classifications are all dichotomous variables and each take the value of ‘1’ if the firm has been associated with a corporate irresponsibility event and ‘0’ otherwise.
(24-28) HARM_TYPES measure the specific influence an act of corporate irresponsibility has upon the victimised stakeholder group. In other words, this variable looks at how stakeholders