Changes in Corporate Social Responsibility and Stock Performance

Hui-Ju Tsai () and Yangru Wu ()
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Hui-Ju Tsai: Washington College

Journal of Business Ethics, 2022, vol. 178, issue 3, No 10, 735-755

Abstract: Abstract We study the relationship between corporate social performance and financial performance by comparing the portfolio returns of firms with changes in corporate social responsibility (CSR) intensity. Using an extensive US sample from the MSCI ESG database, we find that improvement in the overall CSR is generally value enhancing. The relationship varies with CSR dimensions. More importantly, the relationship shifts differently for various CSR dimensions during the crisis period when trust in the society is low and financial resource is limited. Improvement in environment, human rights, and product characteristics shows higher financial returns during the financial crisis period, whereas the value enhancement of improvement in employee relations is more pronounced during the non-crisis period.

Keywords: Corporate social responsibility (CSR); Corporate social performance (CSP); Financial performance; Social capital (search for similar items in EconPapers)
JEL-codes: G10 G11 M14 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (13)

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DOI: 10.1007/s10551-021-04772-w

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