The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness

Servaes, Henri; Tamayo, Ane

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The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness

Management Science, Forthcoming

34 Pages Posted: 24 Jul 2012

See all articles by Henri Servaes

Henri Servaes

London Business School; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Ane Tamayo

London School of Economics & Political Science (LSE); European Corporate Governance Institute (ECGI)

Date Written: July 1, 2012

Abstract

This paper shows that corporate social responsibility (CSR) and firm value are positively related for firms with high customer awareness, as proxied by advertising expenditures. For firms with low customer awareness, the relation is either negative or insignificant. In addition, we find that the effect of awareness on the value-CSR relation is reversed for firms with a poor prior reputation as corporate citizens. This evidence is consistent with the view that CSR activities can add value to the firm but only under certain conditions.

Keywords: Corporate social responsibiliy, firm value, customer awareness, reputation

JEL Classification: M14, L2, G32

Suggested Citation: Suggested Citation

Servaes, Henri and Tamayo, Ane Miren, The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness (July 1, 2012). Management Science, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2116265