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Corporate Social Responsibility and Stock Prices After the Financial Crisis: The Role of Strategic CSR Activities

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Abstract

We analyze the relationship between corporate social responsibility and the stock market performance in the post-global financial crisis period. A new measure of social responsibility by Thomson Reuters, called the ESG Combined Score, is used. As a novel feature of our analysis, socially responsible engagement is divided into the strategic activities closely related to the examined companies’ core business and the remaining secondary activities. The results of the fixed effects regression show a positive and statistically, as well as economically, significant impact of the strategic activities on the corporate stock market performance of companies. This impact is up to 103% higher compared to the secondary activities. The empirical results suggest that if companies aim to increase their share prices via the corporate social responsibility channel, they should strategically select their socially responsible initiatives.

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Data Availability

The data that support the findings of this study are available from the Refinitiv Eikon database (Thomson Reuters, 2021, accessed 2021-01-28). Restrictions apply to the availability of these data, which were used under license for this study. Data are available at https://eikon.thomsonreuters.com with the permission of Thomson Reuters.

Notes

  1. Please note that due to the logarithmic nature of the dependent variable, the precise interpretation of the estimated coefficient of the non-logaritmized independent variable follows: an increase of the independent variable by 1 (small) unit is associated with a change of the dependent variable by \(\big (exp({\widehat{\beta }})-1\big ) \times 100\) percent. This is often approximated by \({\widehat{\beta }} \times 100\) percent. However, such simplification holds well only for ‘very small’ values of \({\widehat{\beta }}\).

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Acknowledgements

Jiri Kukacka gratefully acknowledges financial support from the Charles University PRIMUS program [project PRIMUS/19/HUM/17] and from the Charles University UNCE program [project UNCE/HUM/035]. We are also indebted to I. Jupa and M. Walter for their professional consultation. Finally, we are very thankful to the two anonymous reviewers for their inspiring comments and detailed suggestions.

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Authors and Affiliations

  1. Charles University, Faculty of Social Sciences, Institute of Economic Studies, Opletalova 26, 110 00, Prague 1, Czechia

    Aneta Havlinova & Jiri Kukacka

  2. Czech Academy of Sciences, Institute of Information Theory and Automation, Pod Vodarenskou vezi 4, 182 00, Prague 8, Czechia

    Jiri Kukacka

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  1. Aneta Havlinova
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Appendices

Appendix A: Multicollinearity Assessment: Correlations

Fig. 1
figure 1

Descriptive statistics of the dataset: Correlations

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Appendix B: Regression Results Con’t

Table 7 Regression results with missing R&D equal to 0 or industry average
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Appendix C: Regression Results for the Strategic and Secondary CSR Con’t

Table 8 Regression results for the strategic and secondary CSR con’t
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Table 9 Matching between the Thomson Reuters and SASB Materiality Map industry groups
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Table 10 Matching between the SASB Materiality Map and ESG categories
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Havlinova, A., Kukacka, J. Corporate Social Responsibility and Stock Prices After the Financial Crisis: The Role of Strategic CSR Activities. J Bus Ethics 182, 223–242 (2023). https://doi.org/10.1007/s10551-021-04935-9

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