Publicized Corporate Social Responsibility and Shareholder Value

Using news articles covering firm’s corporate social responsibility (CSR) activities, we find that publicized CSR activities are positively associated with shareholder value. We also implement a two-stage least-squares regression and propensity score matching to establish a causal link between publicized CSR activities and shareholder value. Furthermore, we find that publicized CSR activities are associated with better future operating performance. Our results are consistent with the stakeholder theory of CSR that shareholders value CSR investments that build reputational capital among firm’s stakeholders and that it is important for the stakeholders to be well aware of firm’s value-relevant CSR investments.