Do CSR Activities Increase Firm Value? Evidence from the Korean Market

Chune Young Chung, Sangjun Jung and Jason Young
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Chune Young Chung: School of Business Administration, College of Business and Economics, Chung-Ang University, 84 Heukseok-ro, Dongjak-gu, Seoul 06974, Korea
Sangjun Jung: School of Business Administration, College of Business and Economics, Chung-Ang University, 84 Heukseok-ro, Dongjak-gu, Seoul 06974, Korea
Jason Young: College of Business, Washington State University, Pullman, WA 99164, USA

Sustainability, 2018, vol. 10, issue 9, 1-22

Abstract: Corporate social responsibility has recently become a new metric of corporate performance. Some argue that corporate social responsibility should be used not only for corporate image improvement, but also as a major competitive strategy. Given this perspective, this study considers the effect of corporate social responsibility on firm value using data from all firms listed on the Korea Exchange from 2005 to 2015 that provide corporate social responsibility information. Specifically, we use the Korea Economic Justice Institution Index, which is an important metric for corporate social responsibility in Korea, to empirically analyze the relation between corporate social responsibility and firm value. Further, given the growing attention to the Korean manufacturing environment and the significant influence of the global manufacturing environment, we aim to determine the differential characteristics of manufacturing corporations using the relation between corporate social responsibility and firm value. The results strongly support a positive relation between corporate social responsibility and firm value. Furthermore, our detailed analysis of the manufacturing industry indicates some differential characteristics with respect to this relation. Overall, we find that every corporation should adopt corporate social responsibility as an active competitive strategy, taking the corporate condition into account.

Keywords: corporate social responsibility; firm value; manufacturing industry (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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