Do Investors Value a Firm’s Commitment to Social Activities?

Journal of Business Ethics 114 (4):607-623 (2013)

Waymond Rodgers
University of Hull
Previous empirical research has found mixed results for the impact of corporate social responsibility (CSR) investments on corporate financial performance (CFP). This paper contributes to the literature by exploring in a two stage investor decision-making model the relationship between a firm’s innovation effort, CSR, and financial performance. We simultaneously examine the impact of CSR on both accounting-based (financial health) and market-based (Tobin’s Q) financial performance measures. From a sample of top corporate citizens, we find that: (1) a firm’s social responsibility commitment (CSR) contributes to its financial performance; (2) after controlling for investment in innovation activities, CSR continues to have a positive impact on a firm’s financial performance; (3) the customer dimension of CSR has a positive effect on both CFP measures, whereas the employee dimension indicates a significant impact only on financial heath; and (4) the community relation dimension of CSR only affects the market-based CFP measure of firms with high innovation intensity
Keywords Corporate social responsibility  Corporate financial performance  Innovation  Social dimensions  Investor decision making
Categories (categorize this paper)
DOI 10.1007/s10551-013-1707-1
Edit this record
Mark as duplicate
Export citation
Find it on Scholar
Request removal from index
Revision history

Download options

Our Archive

Upload a copy of this paper     Check publisher's policy     Papers currently archived: 40,625
External links

Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
Through your library

References found in this work BETA

Stakeholder Influence Capacity and the Variability of Financial Returns to Corporate Social Responsibility.Michael L. Barnett - 2005 - Proceedings of the International Association for Business and Society 16:287-292.

View all 13 references / Add more references

Citations of this work BETA

Add more citations

Similar books and articles


Added to PP index

Total views
20 ( #409,295 of 2,242,334 )

Recent downloads (6 months)
7 ( #255,374 of 2,242,334 )

How can I increase my downloads?


My notes

Sign in to use this feature