Do Negative Incidents and Corporate Social Responsibility Influence on Sponsors’ Stock Abnormal Returns?

This study aimed at introducing the panel data analysis to explore the determinants and the effect of ethics violations on the abnormal returns of the sponsors of Chinese Professional Baseball League (CPBL) by using the five negative incidents over 20 years. The financial secondary data collected from the CTMONEY database and the CPBL official website were employed to determine the relationship between sponsors’ attributes and their stock abnormal returns when the CPBL suffers from the gambling scandals through the panel data analysis. The results showed that there were not always significantly negative impacts on the abnormal returns of sponsors when a match-fixing scandal happened in the CPBL, even the sponsors have participate in the activities of corporate social responsibility (CSR). The managerial implication drawn from this study was not only to help professional sports managers or sponsors have a deeper insight into the significance and spillover effect of negative incidents on stock returns, but also for the investors in capital market, the signal effects reflected by the negative incidents could be used as the reference for the further investment decisions. © 2016 AESS Publications. All Rights Reserved.