Corporate Social Responsibility and Stock Returns during the Financial Crisis: Evidence from Europe
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Journal Title
Journal ISSN
Volume Title
School of Business |
Bachelor's thesis
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Author
Date
2019
Department
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
30+2
Series
Abstract
Firms with high social capital, as measured by corporate social responsibility (CSR) enjoyed 6-7% higher excess returns compared to low-CSR firms in Europe during the financial crisis of 2008- 2009. Regional and industry trust are also positively related to firm’s CSR activities and excess crisis-period returns, and the effectiveness of CSR on excess returns varies substantially across the Europe and industries. I also find that external stakeholder activities targeted to environmental issues were most appreciated by investors during the crisis, while other CSR activities had insignificant effect on crisis-period returns. The evidence suggests that social capital and trust, built through CSR activities, serve as an insurance policy for negative events which benefits when overall trust in the economy declines.Description
Thesis advisor
Spickers, TheresaKeywords
Social capital, Trust, Corporate social responsibility, CSR, Stock returns, Financial Crisis, Europe
