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Corporate social responsibility and firm risk : theory and empirical evidence
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Albuquerque, Rui, Koskinen, Yrjo and Zhang, Chendi (2019) Corporate social responsibility and firm risk : theory and empirical evidence. Management Science, 65 (10). pp. 4451-4949. doi:10.1287/mnsc.2018.3043 ISSN 0025-1909.
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Official URL: https://doi.org/10.1287/mnsc.2018.3043
Abstract
This paper presents an industry equilibrium model where firms have a choice to engage in corporate social responsibility (CSR) activities. We model CSR as an investment to increase product differentiation that allows firms to benefit from higher profit margins. The model predicts that CSR decreases systematic risk and increases firm value and that these effects are stronger for firms with high product differentiation. We find supporting evidence for our predictions. We address a potential endogeneity problem by instrumenting CSR using data on the political affiliation of the firm’s home state.
Item Type: | Journal Article | |||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor | |||||||||
Divisions: | Faculty of Social Sciences > Warwick Business School | |||||||||
Library of Congress Subject Headings (LCSH): | Social responsibility of business -- Political aspects -- Mathematical models | |||||||||
Journal or Publication Title: | Management Science | |||||||||
Publisher: | Institute for Operations Research and the Management Sciences (I N F O R M S) | |||||||||
ISSN: | 0025-1909 | |||||||||
Official Date: | October 2019 | |||||||||
Dates: |
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Volume: | 65 | |||||||||
Number: | 10 | |||||||||
Page Range: | pp. 4451-4949 | |||||||||
DOI: | 10.1287/mnsc.2018.3043 | |||||||||
Status: | Peer Reviewed | |||||||||
Publication Status: | Published | |||||||||
Access rights to Published version: | Open Access (Creative Commons) | |||||||||
Date of first compliant deposit: | 25 January 2018 | |||||||||
Date of first compliant Open Access: | 21 November 2018 | |||||||||
RIOXX Funder/Project Grant: |
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