Publication Type

Journal Article

Version

Preprint

Publication Date

10-2016

Abstract

Conventional aggregation of Corporate Social Responsibility (CSR) raw scores and its interpreted impact on firm value have provided mixed evidence in the literature. We show that the value impact of CSR activities relies heavily on the industry-specific relative position of the firm. Only firms that distinguish themselves over their peers are associated with increased firm value. This finding is robust and holds for both responsible and irresponsible behaviors. Information concerns and portfolio construction can allude to a possible CSR clientele, suggesting the existence of an optimal CSR level. Our peer-effect results are robust to unobserved heterogeneity along the lines of Gormley and Matsa (2013).

Keywords

CSR, Corporate governance, Firm value, Stakeholders, Environmental

Discipline

Corporate Finance | Finance and Financial Management

Research Areas

Finance

Publication

International Review of Financial Analysis

Volume

47

First Page

86

Last Page

98

ISSN

1057-5219

Identifier

10.1016/j.irfa.2016.06.013

Publisher

Elsevier

Copyright Owner and License

Authors

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://doi.org/10.1016/j.irfa.2016.06.013

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