Publication Type
Journal Article
Version
submittedVersion
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
Citation
DING, David K.; FERREIRA, Christo; and WONGCHOTI, Udomsak.
Does it pay to be different? Relative CSR and its impact on firm value. (2016). International Review of Financial Analysis. 47, 86-98.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/4996
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.irfa.2016.06.013