Social Responsibility in Capital Markets: A Review and Framework of Theory and Empirical Evidence
67 Pages Posted: 25 Sep 2015 Last revised: 23 Feb 2018
Date Written: February 23, 2018
Abstract
This study consolidates the existing body of knowledge on the theory and empirical evidence of shareholder value effects of social responsibility and the returns to socially responsible investing. In doing so, it draws from the literature in accounting, economics, finance, law and management with evidence from related disciplines. Based on the findings of the prior literature the study proposes a framework that distinguishes between the corporate view (CSR) and the investor view (SRI). In CSR it discriminates between three hypotheses of shareholder value effects of corporate social responsibility: Agency costs, delegated philanthropy and ‘doing well by doing good’. Within the latter it identifies four impact areas and several channels of influence to aid future researchers to answer more targeted research questions on the relationship between CSR and shareholder value. In SRI the study reviews the evidence how social responsibility affects investment returns and how CSR is incorporated into asset prices distinguishing between firm-level and fund-level effects. The study identifies differences by investment strategies and investor characteristics. Based on the proposed framework the study concludes with suggestions for future research.
Keywords: Corporate social responsibility; CSR; socially responsible investing; SRI; shareholder value; instrumental stakeholder theory; ESG investing
JEL Classification: A13, G11, G12, G23, H41, L21, M14, M41
Suggested Citation: Suggested Citation
Register to save articles to
your library
Recommended Papers
-
Corporate Sustainability: First Evidence on Materiality
By Mozaffar Khan, George Serafeim, ...
-
Corporate and Integrated Reporting: A Functional Perspective
By Robert G. Eccles and George Serafeim
-
From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance
By Gordon L. Clark, Andreas Feiner, ...
-
Market Reaction to Mandatory Nonfinancial Disclosure
By Jyothika Grewal, Eddie Riedl, ...
-
A Review of the IFRS Adoption Literature
By Emmanuel T. De George, Xi Li, ...
-
Beyond Sustainability Reporting: Integrated Reporting is Practiced, Required & More Would Be Better
By Adam J. Sulkowski and Sandra Waddock
-
Limitations of Current Financial Reporting: A Case for Integrated Reporting
By Pooja Dhingra, Ajay Kumar Singh, ...
-
From Casual to Causal Inference in Accounting Research: The Need for Theoretical Foundations
By Jeremy Bertomeu, Anne Beyer, ...
-
By Christian Leuz and Peter D. Wysocki
-
By Gordon L. Clark and Michael Viehs