Whether corporate social responsibility (CSR) is beneficial to shareholders remains a topic of considerable debate. Recent studies suggest that some socially beneficial corporate expenditures (e.g., to reduce environmental harm and thereby the firm’s risk exposure) create value for shareholders. In contrast, other types of such expenditures (e.g. to improve the environment beyond what is necessary to comply with the law or mitigate risk), are not viewed by shareholders as value-enhancing. However, there is no evidence on whether individual firms differentiate between CSR expenditures that do and do not benefit shareholders.
In a recent study, we examine differences in the CSR … Read more