Corporate Goodness and Shareholder Wealth

62 Pages Posted: 30 Jun 2013 Last revised: 17 Jul 2014

See all articles by Philipp Krueger

Philipp Krueger

University of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute

Date Written: July 7, 2014


Using a unique data set, I study how stock markets react to positive and negative events concerned with a firm's corporate social responsibility (CSR). I show that investors respond strongly negatively to negative events and weakly negatively to positive events. I then show that investors do value "offsetting CSR", that is positive CSR news concerning firms with a history of poor stakeholder relations. In contrast, investors respond negatively to positive CSR news which is more likely to result from agency problems. Finally, I provide evidence that CSR news with stronger legal and economic information content generates a more pronounced investor reaction.

Keywords: Social and Environmental Responsibility, Shareholder Value, Event Study, Corporate Governance, Corporate Culture, Agency Costs, Corporate Sustainability

JEL Classification: M14, G14, G24, D21, L21

Suggested Citation

Krueger, Philipp, Corporate Goodness and Shareholder Wealth (July 7, 2014). Journal of Financial Economics (JFE), Forthcoming. Available at SSRN: or

Philipp Krueger (Contact Author)

University of Geneva - Geneva Finance Research Institute (GFRI) ( email )

40 Boulevard du Pont d'Arve
Geneva 4, Geneva 1211

Swiss Finance Institute ( email )


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