Using a natural experiment in the Chinese milk industry as background, this paper investigates the reactions of individual and institutional investors to food safety incidents. By classifying firms as either honest or dishonest, we find that: First, honest firms significantly outperform...

Using the melamine contamination incident in China as an exogenous shock, this paper studies how the investors respond to corporate social responsibilities (CSRs) of listed firms in food industry. We find that investors’ or consumers’ concerns for CSR in the food industry could be...