Corporate Social Responsibility, Foreign Direct Investment, and Shareholder Value

27 Pages Posted: 8 May 2020

See all articles by Mei Liu

Mei Liu

Nottingham University Ningbo Campus

Andrew P. Marshall

University of Strathclyde - Strathclyde Business School

Patrick McColgan

University of Strathclyde

Date Written: April 15, 2020

Abstract

We investigate the impact CSR on the shareholder wealth effects of FDI announcements during 2003-2014 using a sample of 2,488 firms from 48 home countries investing into 121 host countries. We find that firms with superior CSR performance do not experience a significant stock market reaction to FDI announcements. Hence, we do not find empirical support for either the stakeholder value maximization view or the shareholder expense view of CSR. We propose explanations for the lack of a significant share price reaction.

Keywords: Corporate Social Responsibility, Foreign Direct Investment, Shareholder Value, Abnormal Return

JEL Classification: F23, G34, M14

Suggested Citation

Liu, Mei and Marshall, Andrew P. and McColgan, Patrick, Corporate Social Responsibility, Foreign Direct Investment, and Shareholder Value (April 15, 2020). Available at SSRN: https://ssrn.com/abstract=3576213 or http://dx.doi.org/10.2139/ssrn.3576213

Mei Liu (Contact Author)

Nottingham University Ningbo Campus ( email )

Ningbo
China

Andrew P. Marshall

University of Strathclyde - Strathclyde Business School ( email )

100 Cathedral Street
Glasgow G4 0LN
United Kingdom
44 0141 548 3894 (Phone)

Patrick McColgan

University of Strathclyde ( email )

Curran Building
100 Cathedral Street
Glasgow, G4 0LN
United Kingdom
+44 1415483690 (Phone)

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