CSR and Market Valuation: International Evidence

Sylvain Marsat () and Benjamin Williams ()
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Sylvain Marsat: CRCGM - Centre de Recherche Clermontois en Gestion et Management - UdA - Université d'Auvergne - Clermont-Ferrand I - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand
Benjamin Williams: CRCGM - Centre de Recherche Clermontois en Gestion et Management - UdA - Université d'Auvergne - Clermont-Ferrand I - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand

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Abstract: Do socially responsible firms benefit from ethical goodwill? On the one hand, taking externalities into account can be a competitive disadvantage. On the other hand, financial benefits may result from ethical behavior. Thanks to a worldwide dataset of ESG ratings (MSCI ESG ratings), we examine the relationship between a firm's CSR rating and its shareholder value. After controlling for industry, region, year and R&D, we observe, contrary to mainstream empirical studies, strong evidence of a negative impact of responsible behavior on corporate market value. More precisely, environmental performance was penalized by investors over the 2005-2009 period, whereas involvement in human capital seems to have been valued by the market.

Keywords: Tobin's q; Firm valuation; ESG Rating; Corporate Social Responsibility (search for similar items in EconPapers)
Date: 2013
Note: View the original document on HAL open archive server: https://hal.science/hal-02156596v1
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Citations: View citations in EconPapers (11)

Published in Bankers Markets & Investors : an academic & professional review, 2013, 123, pp.29 - 42. ⟨10.2139/ssrn.1833581⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02156596

DOI: 10.2139/ssrn.1833581

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