Corporate Social Responsibility (CSR):Impact on Equity Returns

Abstract

In recent time, Corporate Social Responsibility (CSR) has become mandatory for many listed companies. However, it always remains a debatable issue that CSR should be mandatory or it should come from company’s own wish. Corporate always thrust for the wealth maximization of their shareholder’s wealth and hence expense behind CSR may result into company value decline.
On the contrary, it may give a positive impression of the company in the market and help in increasing their sales and profits. Thus, there is also a possibility that CSR actually results into shareholder’s wealth creation. Here, in current study authors have tried to identify this impact of CSR on equity returns.
For the same 30 companies score for 96 CSR items was calculated and the average score was regressed with companies’ equity returns for the last four years.