Research Discussion Papers, Bank of Finland
No 1/2009:
Corporate social responsibility and shareholder's value: an empirical analysis
Leonardo Becchetti, Rocco Ciciretti and Iftekhar Hasan ()
Abstract: In today’s global economy, corporate social responsibility
(CSR) is a core component of corporate strategy. Due in part to financial
scandals, losses, and the diminished reputation of the affected listed
companies, CRS is emerging as a crucial instrument for minimizing conflicts
with stakeholders. While corporations are busy adopting and enhancing CSR
practices, there is (beyond a very few notable exceptions) no established
empirical research on its impact and relevance for the capital market. Our
paper investigates this issue by tracing market reactions to corporate
entry into and exit from the Domini 400 Social Index (a recognized CSR
benchmark) between 1990 and 2004. Our paper highlights two main findings:
i) a significant upward trend in absolute values of abnormal returns,
irrespective of the event (entry/exit vis-ŕ-vis the index) type; and ii) a
significant negative effect on abnormal returns after announcement from the
Domini index. The latter effect continues to persist even after controlling
for concurring financial distress shocks and stock market seasonality.
Keywords: corporate social responsibility; event study; (follow links to similar papers)
JEL-Codes: D21; G14; L21; (follow links to similar papers)
50 pages, January 19, 2009
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
0901netti.pdf 
Download Statistics
Questions (including download problems) about the papers in this series should be directed to Minna Nyman ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design by Joachim Ekebom
