Does corporate social responsibility create shareholder value? The importance of long-term investors

Nguyen, Phuong Anh; Kecskés, Ambrus; Mansi, Sattar

doi:10.1016/j.jbankfin.2017.09.013

Cited by 189 publications

(119 citation statements)

References 72 publications

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“…In fact, Benlemlih and Bitar (2018) demonstrate that CSR activities reduce the investment inefficiencies. Moreover, Nguyen, Kecskes, and Mansi (2020) provide evidence that CSR activities increase shareholder value when long‐term investors monitor managers. All in all, there are many studies supporting the argument that ESG activities are value‐enhancing for not only shareholders but also for stakeholders.…”

Section: Literature Reviewmentioning

confidence: 99%

Economic policy uncertainty, stakeholder engagement, and environmental, social, and governance practices: The moderating effect of competition

Vural‐Yavaş

2020

Corp Soc Responsibility Env

100

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This paper investigates the effect of the economic policy uncertainty (EPU) on corporate environmental, social, and governance practices (ESG), using 6,562 firm‐year observations from 15 developed European countries covering the period from 2004 to 2017. The results show that during periods of high uncertainty, firms increase their overall ESG performance, corporate environmental performance, and performance in governance. The relationship is valid for emission, resource use, workforce, management, and corporate social responsibility (CSR) strategy subdimensions of ESG. Furthermore, during periods of high uncertainty, firms operating in concentrated industries increase their overall ESG activities and corporate environmental performance. These results suggest that firms use ESG practices as risk‐reducing activities like insurance, during high periods of uncertainty. Overall, consistent with the stakeholder theory, the results indicate that firms increase their ESG practices not only to reduce corporate risk‐taking but also to follow value‐increasing activities during periods of high uncertainty, implying an improved stakeholder engagement.

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Section: Literature Reviewmentioning

confidence: 99%

Economic policy uncertainty, stakeholder engagement, and environmental, social, and governance practices: The moderating effect of competition

Vural‐Yavaş

2020

Corp Soc Responsibility Env

100

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“…In support of this view, an emerging strand of literature attempts to identify the contextual factors via which CSR performance affects firm value, such as the level of customer awareness (Servaes and Tamayo, 2013), the presence of sophisticated investors (Nguyen et al , 2017; Buchanan et al , 2018), and the differences between country‐level institutions (El Ghoul et al , 2017). For example, Brammer and Pavelin (2006) suggest that the effects of various types of CSR activities are likely to vary among fields of industry.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Corporate Social Responsibility, Product Strategy, and Firm Value

Cho

Tsang

2020

Asia-Pac J of Fin Stud

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This study examines the role of a firm's product strategy on the relationship between corporate social responsibility (CSR) and firm value. Using a sample of 1287 firm-year observations of Korean listed manufacturing firms from 2005 to 2016, we find that a firm's product differentiation strategies strengthen the association between CSR and firm value, whereas cost-leadership strategies weaken such a relationship. Our findings demonstrate the importance of attaining a strategic fit between CSR activities and product strategies, and highlight the importance of considering a firm's product strategy when evaluating a firm's CSR investment.

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“…Recent studies have examined various elements of this relationship. For example, Chen, Dong and Lin [1], Nguyen, Kecskés and Mansi [2] and Oikonomou, Yin and Zhan [3] investigate the relevance of CSR to investors' investment decisions; Jin, Cheng and Zeng [4] investigate the stock market's impact on firms' corporate socially irresponsible (hereafter, CSiR) events. While previous research explicitly indicates CSR and customer satisfaction as intangible assets that work in achieving a firm's sustainable competitive advantage and higher performance.…”

Section: Introductionmentioning

confidence: 99%

“…SRI is becoming increasingly popular because of the increase in funds invested according to socially responsible criteria, constituting more than US$11.6 trillion in assets under management in the Unites States in 2018. (https://www.ussif.org/files/2018%20_Trends_OnePager_ Overview (2).pdf) A recent survey indicated that a large majority of chief executive officers (CEOs) believe that CSR improves firm competitiveness and is crucial for a firm's future success [6]. CSR is a high-profile notion that has strategic importance to numerous companies.…”

Section: Introductionmentioning

confidence: 99%

Effects of Corporate Social Responsibility on Firm Performance: Does Customer Satisfaction Matter?

et al. 2020

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Academic research has shed light on the empirical relationships among a firm’s corporate social responsibility (CSR), corporate social irresponsibility (CSiR) and firm performance and on the firm’s customer satisfaction–firm performance relationship in different markets. However, little notice has been taken of whether the coexistence of corporate social responsibility, corporate social irresponsibility and customer satisfaction has an interactive effect on firm performance. This study aims to examine the effects of their interaction on firm performance from an investment perspective. Using unbalanced panel regression to test a sample of publicly traded firms from the United States, this study finds that, in general, firms with higher customer satisfaction earn positive changes in abnormal stock returns. For firms that engage in CSR, CSR positively affects corporate performance, whereas firms’ social irresponsibility activities reduce firms’ financial performance. All else equal, a positive interactive effect of CSiR and customer satisfaction on stock return was observed. The results reveal that high customer satisfaction can alleviate the negative effect of corporate social irresponsibility on firms’ financial performance. Our findings will help management executives and investors to understand that the negative effect of a firm’s unforeseen events on firm performance can be weakened by increasing customer satisfaction.

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Does corporate social responsibility create shareholder value? The importance of long-term investors

Cited by 189 publications

References 72 publications

Economic policy uncertainty, stakeholder engagement, and environmental, social, and governance practices: The moderating effect of competition

Economic policy uncertainty, stakeholder engagement, and environmental, social, and governance practices: The moderating effect of competition

Corporate Social Responsibility, Product Strategy, and Firm Value

Effects of Corporate Social Responsibility on Firm Performance: Does Customer Satisfaction Matter?

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