This seminar, held by the Department for Accounting and Finance, discusses the findings of "The Shareholder Wealth Effects of Modern Slavery Reporting Requirements", a report based on a research paper co-authored with Paul Cousins.
We examine the shareholder wealth effects of the adoption of the Transparency in Supply Chains (TISC) clause embedded in the UK Modern Slavery Act (MSA) (2015). The TISC clause introduced new reporting requirements mandating certain firms to provide an annual statement on actions taken to tackle modern slavery in their business and supply chains. An event study of stock market reactions to eight events associated with the adoption of the clause provides no evidence of abnormal stock returns for the combined events. We do, however, find a significant positive stock market reaction on the first formal announcement of the MSA. A cross-sectional regression analysis indicates that abnormal stock returns are more positive for firms with a lower risk of modern slavery in their business and supply chains. We also find some evidence that stock market reactions are more positive for firms with lower direct costs of disclosure, but no evidence of an impact of firms’ pre-regulatory information quality on stock prices. Our results highlight the economic value for companies of maintaining and demonstrating ethical sourcing practices, and inform the current policy debate on the importance of greater transparency in corporate supply chains.
Marie Dutordoir has a Ph.D. in Applied Economics from the Catholic University of Leuven. She spent the final year of her Ph.D. as a visiting scholar at Columbia Business School. Before joining Manchester Business School in April 2009, Marie held a position at the Rotterdam School of Management. Her research deals with corporate securities issuance, mergers and acquisitions, short selling, corporate social responsibility, and topics at the interface between finance and other business disciplines (accounting, marketing, operations management). Marie holds scientific publications in leading international finance journals such as Journal of Financial Economics, Journal of Operations Management, Journal of Banking and Finance, Journal of Corporate Finance, and Financial Management.
If you would like to attend this seminar, please contact the DAF Conferences Team.