Corporate Social Responsibility and Firm Performance: Investor Preferences and Corporate Strategies

Academy of Management Review, Forthcoming

14 Pages Posted: 12 Oct 2005

See all articles by Alison Mackey

Alison Mackey

Ohio State University (OSU) - Fisher College of Business

Tyson B. Mackey

Clarkson University - School of Business; University of Utah - David Eccles School of Business; Ohio State University (OSU) - Human Resource Research

Jay B. Barney

Ohio State University (OSU) - Human Resource Research

Abstract

Debates continue to rage between those that argue that managers should maximize the present value of their firm's cash flows in making strategic choices and those that argue that, sometimes, the wealth maximizing interests of a firm's equity holders should be abandoned for the good of a firm's other stakeholders. This debate is addressed by proposing a theoretical model in which the supply of and demand for socially responsible investment opportunities determines whether these activities will improve, reduce, or have no impact on a firm's market value. The theory shows that managers in publicly traded firms might fund socially responsible activities that do not maximize the present value of its future cash flows yet still maximize the market value of their firm.

Keywords: Firm performance, corporate social responsibility

Suggested Citation

Mackey, Alison and Mackey, Tyson B. and Barney, Jay, Corporate Social Responsibility and Firm Performance: Investor Preferences and Corporate Strategies. Academy of Management Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=816425

Alison Mackey (Contact Author)

Ohio State University (OSU) - Fisher College of Business ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

Tyson B. Mackey

Clarkson University - School of Business ( email )

Potsdam, NY 13699-5780
United States

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

Ohio State University (OSU) - Human Resource Research ( email )

700 Fisher Hall
2100 Neil Avenue
Columbus, OH 43210-1144
United States

Jay Barney

Ohio State University (OSU) - Human Resource Research ( email )

700 Fisher Hall
2100 Neil Avenue
Columbus, OH 43210-1144
United States
614-688-3161 (Phone)

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