Equity market response to natural disasters: Does firm's corporate social responsibility make difference?

Ihtisham A. Malik, Hasibul Chowdhury and Md Samsul Alam

Global Finance Journal, 2023, vol. 55, issue C

Abstract: This study investigates the role of corporate social responsibility (CSR) in explaining firms' stock performance in the wake of natural disasters in the United States. Using event study and multivariate regression analyses, we find that market performance of CSR firms is better than that of non-CSR firms when such disasters occur. We also highlight the importance of environmentally friendly practices in driving the performance of CSR firms. Our results indicate that firms practicing environmental CSR are more resilient to such disasters than nonenvironmental CSR firms. Cross-sectional analyses show that such positive market reaction of CSR firms is more pronounced when firms have low financial constraints, low information asymmetry, and high social capital.

Keywords: Corporate social responsibility; Natural disasters; Equity markets; Event study (search for similar items in EconPapers)
JEL-codes: G10 G14 Q54 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:55:y:2023:i:c:s104402832200103x

DOI: 10.1016/j.gfj.2022.100801

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