Abstract
AbstractOur article investigates the relationship between the corporate social responsibility (CSR) activities of firms from “shunned” industries and the firms' long‐term value. Contrary to the existing research, we find that these firms' CSR activities are motivated by business or regulatory reasons, and not altruistic ones. We also document that in alcohol and tobacco industries, there is a positive relationship between the number of concerns about the firms' products and the long‐term value of these firms. Additionally, we find that some CSR activities that may, prima facie, look good could actually be exacerbating social problems. Among the “shunned” industries, the gambling industry is the only one that shows a positive relationship between firm value and diversity. The community leaders of certain ethnic groups are alarmed that the gambling industry targets groups with a higher percentage of gambling disorders.
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