Abstract
We study the effect of corporate social responsibility (CSR) on shareholder value. We argue that long-term investors can ensure that managers choose CSR to maximize shareholder value. We find that long-term investors do increase the value to shareholders of CSR, not through higher cash flow but rather through lower cash flow risk. Following prior work, we use indexing by investors and state laws on stakeholder orientation for identification. Our findings suggest that investing in CSR can create shareholder value as long as managers are properly monitored by long-term investors.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
