The Market Acceptance of Corporate Social Responsibility: A Comparison Across Six Countries/Regions

Posted: 4 Aug 2012

See all articles by Ronald Geoffrey Bird

Ronald Geoffrey Bird

University of Technology Sydney (UTS) - School of Finance and Economics; Financial Research Network (FIRN)

Francesco Momentè

Bocconi University - Department of Accounting

Francesco Reggiani

University of Zurich

Date Written: June 11, 2012

Abstract

Information on the link between market performance and corporate social responsibility (CSR) activities provides an indication of the extent of acceptance by investors of these types of activities. The nature of this relationship is of critical importance for management trying to reconcile the demands of the company’s shareholders with those of a much wider group of stakeholders and for investors pursuing a socially responsible investing strategy. Using an international database we investigate the extent to which expenditures on CSR activities are valued across market in six countries/regions. We find that CSR activities are highly valued by the investors in the European markets, where our findings clearly indicate that such activities lead to higher market valuations. In the US, Japan and Australia expenditures on CSR activities have a neutral impact on company valuation, which is still a good outcome for management who wish to incorporate into their decision process the objectives of a wide spectrum of stakeholders and for investors wishing to tilt their investments towards the more socially responsible companies.

Keywords: International, market reaction, responsible management, socially responsible investing

Suggested Citation

Bird, Ronald Geoffrey and Momentè, Francesco and Reggiani, Francesco, The Market Acceptance of Corporate Social Responsibility: A Comparison Across Six Countries/Regions (June 11, 2012). Australian Journal of Management, Vol. 37, No. 2, 2012, Available at SSRN: https://ssrn.com/abstract=2122488

Ronald Geoffrey Bird (Contact Author)

University of Technology Sydney (UTS) - School of Finance and Economics ( email )

Haymarket
Sydney, NSW 2007
Australia
+ 612 9514 7716 (Phone)
+ 612 9514 7711 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Francesco Momentè

Bocconi University - Department of Accounting ( email )

Via Roentgen 1
Milan, 20136
Italy

Francesco Reggiani

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

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