Does the Market Value Social Pillar?

Abstract

The paper addresses the link between the social component of corporate social responsibility and market value of equities. Preceding results on this topic are, to our knowledge, still scarce and not really conclusive. Using a both rich and worldwide dataset, Asset4 – Thomson Reuters, we find that social expenses are clearly value-adding. Moreover, all the social subsets are positively related to a goodwill, even if those concerning human capital reveal to be more significant. Social expenses therefore prove to be a social investment, creating value for both social stakeholders and shareholders.

Keywords: Social pillar, Market value, Corporate social responsibility, Reputation, Human capital

JEL Classification: G11, G12