Investor Sentiment for Corporate Social Performance
43 Pages Posted: 11 May 2015 Last revised: 6 Nov 2018
Date Written: October 21, 2018
We document time varying investor sentiment for corporate social responsibility (“CSR”) performance. We show that announcements of CSR activities generate positive abnormal returns during periods when investors place a valuation premium on CSR performance. In addition, we find that firms boost CSR performance in response to investor sentiment, and that this response is more pronounced for those firms that are more inclined to respond to investor sentiment due to valuation uncertainty and investor horizon. Our results suggest that investor sentiment plays a role in firms’ commitment to CSR.
Keywords: , Investor Sentiment, Corporate Social Responsibility
JEL Classification: M41, D82, G14, G30, G31, G32, G34
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