Corporate Social Responsibility and Firm Value: Disaggregating the Effects on Cash Flow, Risk and Growth

Gregory, Alan; Tharyan, Rajesh; Whittaker, Julie M.

doi:10.1007/s10551-013-1898-5

Cited by 254 publications

(179 citation statements)

References 63 publications

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“…These findings are inconclusive and do not provide definitive support for the competitive advantage hypothesis (H1). However, if cash flow is associated with superior long-run growth prospects, as Gregory et al (2014) emphasise, our results do not contradict the competitive advantage of the firm in the long run.…”

supporting

confidence: 42%

“…Early studies show that investors perceive socially responsible firms as low risk with respect to investment (Orlitzky and Benjamine, 2001). More recent research also indicates a negative relationship between CSP and market-based risk (Boutin-Dufresne and Savaria, 2004;Gregory et al, 2014;Mishra and Modi, 2013;Salama et al, 2011). Other research highlights the influence of CSR on costs of capital (Ghoul et al, 2011;Goss and Roberts, 2011).…”

Section: The Relationship Between Csp and Cfpmentioning

confidence: 98%

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The link between corporate social performance and financial performance: empirical evidence from Japanese firms

Suto

Takehara

2016

IJCSSR

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Abstract:Since the globalisation of business and stock ownership in the 2000s, Japanese firms' relationships with shareholders and the policies related to corporate social responsibility (CSR) have significantly changed. This study adopts a stakeholder relationship approach to examining these changes and investigates the channels that link corporate social performance (CSP) and corporate financial performance (CFP) in the Japanese context. We found that the composite measure of CSP and a large part of dimensional CSP are significantly negatively related to all risk measures employed in this study. With respect to dimensional CSP, it is remarkable that environment and social contribution showed a strong negative relationship with market-based risk measures. However, the effects of CSP on profitability are mixed, and only the employee relationship is positively associated with profitability measures. These findings suggest that risk reduction through CSR activities holds more significance in creating long-term value for Japanese firms.

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supporting

confidence: 42%

Section: The Relationship Between Csp and Cfpmentioning

confidence: 98%

The link between corporate social performance and financial performance: empirical evidence from Japanese firms

Suto

Takehara

2016

IJCSSR

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“…9 Although not plentiful, the literature does offer some evidence on the impact of CSR on future growth. One example is the work of Gregory et al (2013) who trace the positive valuation effect of CSR to the better long-term growth prospects enjoyed by such firms and, marginally, to their lower cost of equity. Also Alan et al (2014) report finding that CSR engenders long run growth prospects that lead to positive valuation effects.…”

Section: Simulations For the Model With Discrete Probability Distribumentioning

confidence: 99%

Valuation effects of corporate social responsibility

Fatemi

Fooladi

Tehranian

2015

Journal of Banking & Finance

291

129

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“…Solomon, 2010;King, 2012). Analogously, Gregory, Tharyan and Whittaker (2013) find that firms with sound governance practices generally have better longer-term growth prospects, coupled with slightly lower costs of equity. De Klerk and De Villiers (2012) reached a comparable conclusion in a South African context, finding that firms which actively report on CSR issues tend to enjoy higher share prices.…”

Section: Corporate Social Responsibility Event Methodologies and Marmentioning

confidence: 71%

Assessing the potential impact of the Marikana incident on South African mining companies: An event method study

Hill

Maroun

2015

SAJEMS

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This study examines the potential impact of industrial unrest and the outbreak of violence at Marikana on 16 August 2012 on the share prices of mining companies listed on the Johannesburg Stock Exchange (JSE) using an event methodology. Contrary to expectations, the Marikana incident does not appear to have had a widespread and prolonged effect on the South African mining sector. This may be the result of the strike action already having been discounted into the price of mining shares, implying that the market was only reacting to the unusually violent (but short-lived) protest. Alternately, the results could be indicative of investor confidence in the corporate social responsibility initiatives of the South African mining industry as a whole.This paper is the first to examine the potential impact of the Marikana incident on the share prices of mining companies listed on the JSE. It should be of interest to both academics and practitioners wanting to understand how share prices react to exogenous events. It is also relevant for corporate-governance researchers concerned with the relevance of social and governance practices in a South African setting. This research is faced with the limitations associated with most statistical research: that causality cannot be ascribed to tested relationships. Notwithstanding these limitations, it is argued that these findings are important, given the significant coverage of the Marikana incident and the ongoing debate on the need for corporate social responsibility.

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Corporate Social Responsibility and Firm Value: Disaggregating the Effects on Cash Flow, Risk and Growth

Cited by 254 publications

References 63 publications

The link between corporate social performance and financial performance: empirical evidence from Japanese firms

The link between corporate social performance and financial performance: empirical evidence from Japanese firms

Valuation effects of corporate social responsibility

Assessing the potential impact of the Marikana incident on South African mining companies: An event method study

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