Shareholder wealth effects of modern slavery regulation

We examine the shareholder wealth effects of the adoption of the UK Modern Slavery Act 2015 (MSA).

The MSA’s Transparency in Supply Chains clause introduced new reporting requirements mandating certain firms to provide an annual statement outlining how they identify and mitigate modern slavery in their business and supply chain. An event study of stock price reactions of UK firms covered by the MSA to eight events associated with its adoption provides no evidence of abnormal stock returns. We do, however, uncover significant cross-sectional differences in stock price reactions, with results suggesting that the MSA provides a competitive advantage to firms with a demonstrated track record of addressing slavery risk. We find no effects for pre-regulatory Corporate Social Responsibility disclosure.

Joao Quariguasi

Joao Quariguasi is the Chaired Professor in Operations Management at the University of Manchester, Alliance Manchester Business School. He holds a PhD in Management, with emphasis on Decision Sciences, awarded by the Rotterdam School of Management. Joao is an experienced teacher, having lectured in bachelor, masters and MBA programmes. Joao has published in journals such as Management Science, Journal of Operations Management, Production and Operations Management, and the European Journal of Operational Research.