Corporate Social Responsibility and Stock Market Performance

Alexander, Gordon J.; Buchholz, Rogene A.

doi:10.5465/255728

Cited by 252 publications

(209 citation statements)

References 4 publications

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“…Abbott and Monsen (1979) incorporated dividends but did not control for risk, and found no relationship between CSR and stock returns. When controlling for risk, Alexander and Buchholz (1978) also found no relationship. The papers that do employ modern techniques uncover mixed results: In the finance literature, a large number of studies find a zero or negative effect of CSR on stock returns (see Edmans, 2011, for a survey).…”

Section: This Paper's Approachmentioning

confidence: 87%

The Link Between Job Satisfaction and Firm Value, with Implications for Corporate Social Responsibility

Edmans

2012

SSRN Journal

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Executive OverviewHow are job satisfaction and firm value linked? I tackle this long-standing management question using a new methodology from finance. I study the effect on firm-level value, rather than employee-level productivity, to take into account the cost of increasing job satisfaction. To address reverse causality, I measure firm value by using future stock returns, controlling for risk, firm characteristics, industry performance, and outliers. Companies listed in the "100 Best Companies to Work For in America" generated 2.3% to 3.8% higher stock returns per year than their peers from 1984 through 2011. These results have three main implications. First, consistent with human resource management theories, job satisfaction is beneficial for firm value. Second, corporate social responsibility can improve stock returns. Third, the stock market does not fully value intangible assets, and so it may be necessary to shield managers from short-term stock prices to encourage long-run growth.

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Section: This Paper's Approachmentioning

confidence: 87%

The Link Between Job Satisfaction and Firm Value, with Implications for Corporate Social Responsibility

Edmans

2012

SSRN Journal

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“…This is due to potential investors and lenders interpreting a low level of social responsibility as a lack of the managerial skills required to gradual gain a reputation [62,63]. They therefore perceive the firm's future, and hence its shares, as riskier.…”

Section: Discussion Of Resultsmentioning

confidence: 99%

Financial Performance of Socially Responsible Firms: The Short- and Long-Term Impact

2017

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Abstract:The pressure of society for firms to adopt socially responsible behavior is evident. Yet, Corporate Social Responsibility (CSR) needs an economic justification. In response to this, there exists a comprehensive literature that analyzes the possible relation between social and business financial performance. During the last decade, the literature has been heading toward the carrying out of dynamic studies as researches find that the relationship between social and financial performance is not static. The purpose of this work is to analyze the relevance for the financial performance of Spanish listed firms of maintaining their responsible behavior. To do so, we carry out a comparison between two analyses-one cross-sectional, and the other longitudinal-to be able to conclude whether or not adopting responsible criteria makes a difference in business financial performance in the short and long-term. Some of the results obtained in the cross-sectional study are consolidated in the long-term study. In this sense, responsible firms exhibit a higher systematic risk and have greater size. As a conclusion, be responsible does not mean less stock profitability or a lower business result. It certainly contributes to firms continuing to voluntarily incorporate good corporate social responsibility practices into their business models. What is more, these results support the governmental policies and initiatives that bolster corporate social responsibility.

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“…Nevertheless, increased profitability can have a direct effect on the extent of environmental and social disclosure. Supporting arguments for this claim point out that a profitable organization is more exposed to social pressures (Ng and Koh, 1994), and is most likely managed by skilled and insightful executives who can potentially foresee the benefits of social responsiveness (Alexander and Buchholz, 1978;Belkaoui and Karpik, 1989), but mostly that it has the available economic resources to engage in NFD (Cowen et al, 1987;Hackston and Milne, 1996;Roberts, 1992). Thus, the following hypothesis is postulated: H 3 .…”

Section: A Skouloudis Et Al / Journal Of Cleaner Production XXX (20mentioning

confidence: 99%

Trends and determinants of corporate non-financial disclosure in Greece

Skouloudis

Jones

Malesios

et al. 2014

Journal of Cleaner Production

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Corporate Social Responsibility and Stock Market Performance

Cited by 252 publications

References 4 publications

The Link Between Job Satisfaction and Firm Value, with Implications for Corporate Social Responsibility

The Link Between Job Satisfaction and Firm Value, with Implications for Corporate Social Responsibility

Financial Performance of Socially Responsible Firms: The Short- and Long-Term Impact

Trends and determinants of corporate non-financial disclosure in Greece

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