Corporate Social Responsibility, Product Market Perception and Firm Value

51 Pages Posted: 8 Sep 2017 Last revised: 7 Jul 2020

See all articles by Katsiaryna Bardos

Katsiaryna Bardos

Fairfield University

Mine Ertugrul

University of Massachusetts Boston

Lucia Silva Gao

University of Massachusetts Boston

Date Written: November 12, 2019

Abstract

We examine whether corporate social responsibility (CSR) is used to signal product quality and whether CSR affects firm value through its positive effect on product market perception. Using a proprietary database, we find that visible CSR, such as environmental and community involvement, positively impacts product market perception, particularly for standardized goods and in competitive industries, and that this impact is more pronounced for product quality attributes. Furthermore, we find that CSR indirectly increases firm value through an improvement in product market perception. We conclude that product market perception is a channel through which CSR creates firm value.

Keywords: corporate social responsibility, firm value, brand value

JEL Classification: M14, G32

Suggested Citation

Bardos, Katsiaryna and Ertugrul, Mine and Silva Gao, Lucia, Corporate Social Responsibility, Product Market Perception and Firm Value (November 12, 2019). Journal of Corporate Finance, 2020, Available at SSRN: https://ssrn.com/abstract=3032581 or http://dx.doi.org/10.2139/ssrn.3032581

Katsiaryna Bardos

Fairfield University ( email )

Dolan School of Business
1073 North Benson Road
Fairfield, CT 06824
United States

Mine Ertugrul (Contact Author)

University of Massachusetts Boston ( email )

100 Morrissey Blvd
Boston, MA 02125
United States

Lucia Silva Gao

University of Massachusetts Boston ( email )

100 Morrissey Blvd
Boston, MA 02125
United States

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