The Value of Names - Civil Society, Information, and Governing Multinationals on the Global Periphery

Abstract

Civil society plays a crucial role in governance where laws and authority are weak. Increasingly, multinationals operate in these complex environments. We study how a key strategy of international civil society--disseminating information about human rights abuse--impacts multinationals. To do so, we focus on trends at the center of international campaigns: the assassination of activists, and collect 20 years of murders related to the global mining sector. Using event study methodology, we estimate the impact of human rights reporting on the stock price of firms connected to events. We find that the effect of the human rights spotlight is substantial. Firms named in assassination coverage have large, negative abnormal returns following assassinations. Our estimates imply a median loss in market capitalisation of 100 million USD. We show the media plays a crucial role in these effects: the negative impact of assassinations is strongest when they coincide with calm news cycles versus peak news cycles, when news may be crowded out by large, international stories. In addition, we argue our results are driven by events where companies are explicitly named in the reporting. Last, we show activist assassinations are positively related to the royalties paid by mining projects to domestic governments.