Abstract

http://ssrn.com/abstract=1961971
 
 

References (55)



 
 

Citations (2)



 


 



Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence


Rui A. Albuquerque


Boston College, Carroll School of Management; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Art Durnev


University of Iowa - Henry B. Tippie College of Business

Yrjo Koskinen


The Wharton School - University of Pennsylvania

October 23, 2015


Abstract:     
This paper presents an industry equilibrium model where firms have a choice to engage in corporate social responsibility (CSR) activities. We model CSR activities as a product differentiation strategy allowing firms to benefit from higher profit margins. The model predicts that CSR decreases systematic risk and increases firm value and that these effects are stronger for firms operating in differentiated goods industries and when consumers' expenditure share on CSR goods is small. We find supporting evidence for our predictions. We address a potential endogeneity problem by instrumenting CSR using data on the political affiliation of the firm's home state.

Number of Pages in PDF File: 62

Keywords: corporate social responsibility, product differentiation, systematic risk, beta, firm value, industry equilibrium

JEL Classification: G12, G32, D43, L13, M14


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Date posted: November 20, 2011 ; Last revised: November 7, 2015

Suggested Citation

Albuquerque, Rui A. and Durnev, Art and Koskinen, Yrjo, Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence (October 23, 2015). Available at SSRN: http://ssrn.com/abstract=1961971 or http://dx.doi.org/10.2139/ssrn.1961971

Contact Information

Rui A. Albuquerque
Boston College, Carroll School of Management ( email )
140 Commonwealth Avenue
Chustnut Hill, MA 02467-3808
United States
HOME PAGE: http://ruialbuquerque.webs.com
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Artyom Durnev (Contact Author)
University of Iowa - Henry B. Tippie College of Business ( email )
Acquisitions
5020 Main Library
Iowa City, IA 52242-1000
United States
(514) 398-5394 (Phone)
(514) 398-3876 (Fax)
HOME PAGE: http://www.artdurnev.com
Yrjo Koskinen
The Wharton School - University of Pennsylvania ( email )
Finance Department
3620 Locust Walk
Philadelphia, PA 19104
United States
215-898-1587 (Phone)

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