How Corporate Social Responsibility and Influential Institutional Ownership Affect Firm Value

Corporate social responsibility (CSR) is defined as “actions that appear to further some social good, beyond the interests of the firm and that which is required by law” (McWilliams and Siegel, 2001). According to this definition, CSR activities not only affect investing stakeholders such as stockholders and debtholders, but also non-investing stakeholders such as customers, community, and social organizations. With such a broad scope of stakeholders involved, is a firm’s socially responsible behavior consistent with value-maximizing interests of investors? Put another way, does CSR enhance firm value? Whether and how does influential institutional ownership affect the relation between CSR and … Read more