Business Ethics: A Quantitative Analysis of the Impact of Unethical Behavior by Publicly Traded Corporations

Abstract

This study examines whether the financial markets penalize public corporations for unethical business practices. Using event study methodology, it is found that upon the announcement that a firm is under investigation or has in some way engaged in unethical behavior, a statistically significant negative abnormal (excess) return is found. This suggests that firms are indeed penalized for their unethical actions.

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Gunthorpe, D.L. Business Ethics: A Quantitative Analysis of the Impact of Unethical Behavior by Publicly Traded Corporations. Journal of Business Ethics 16, 537–543 (1997). https://doi.org/10.1023/A:1017985519237

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Keywords

  • Economic Growth
  • Quantitative Analysis
  • Business Ethic
  • Financial Market
  • Unethical Behavior