London Business School; University of Cambridge - Judge Business School
Boston College - Department of Finance
Temple University - Fox School of Business and Management
December 17, 2012
We analyze an extensive proprietary database of corporate social responsibility engagements with US public companies over 1999–2009. Engagements address environmental, social, and governance concerns. They are followed by a one-year abnormal return that averages 1.8%, comprising 4.4% for successful and zero for unsuccessful engagements. We document outperformance following environmental/social, as well as governance, engagements. Firms are more likely to be engaged, and engagements are more likely to be successful, if the target firm is concerned about its reputation and if it has higher capacity to implement corporate social responsibility changes. After successful engagements, companies experience improvements in operating performance, profitability, efficiency, and governance.
Number of Pages in PDF File: 48
Keywords: Engagement, corporate social responsibility (CSR), environmental, social, and governance (ESG), socially responsible investing (SRI), universal ownership, shareholder activism
JEL Classification: G15, G23, G34working papers series
Date posted: October 1, 2012 ; Last revised: February 6, 2013
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
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