Les Cahiers de Recherche - HEC Paris
Do Ratings of Firms Converge? Implications for Managers, Investors and Strategy Researchers
() and Samuel Touboul
Abstract: Raters of firms play an important role in assessing
domains ranging from sustainability to corporate governance to best places
to work. Managers, investors, and scholars increasingly rely on these
ratings to make strategic decisions, invest trillions of dollars in capital
and study corporate social responsibility (CSR), guided by the implicit
assumption that the ratings are valid. The authors document the surprising
lack of agreement across social ratings from six well-established raters.
These differences remain even when we adjust for explicit differences in
the definition of CSR held by different raters, implying the ratings have
low validity. The authors' results suggest that users of social ratings
should exercise caution in interpreting their connection to actual CSR and
that raters should conduct regular evaluations of their ratings.
Keywords: N/A; (follow links to similar papers)
30 pages, November 15, 2014
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