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Social capital, trust, and firm performance: the value of corporate social responsibility during the financial crisis

Lins, Karl V., Servaes, Henri and Tamayo, Ane (2017) Social capital, trust, and firm performance: the value of corporate social responsibility during the financial crisis. Journal of Finance, 72 (4). pp. 1785-1823. ISSN 0022-1082

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Identification Number: 10.1111/jofi.12505

Abstract

During the 2008-2009 financial crisis, firms with high social capital, measured as corporate social responsibility (CSR) intensity, had stock returns that were four to seven percentage points higher than firms with low social capital. High-CSR firms also experienced higher profitability, growth, and sales per employee relative to low-CSR firms, and they raised more debt. This evidence suggests that the trust between the firm and both its stakeholders and investors, built through investments in social capital, pays off when the overall level of trust in corporations and markets suffers a negative shock.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/(IS...
Additional Information: © 2017 The American Finance Association
Divisions: Accounting
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
JEL classification: D - Microeconomics > D6 - Welfare Economics > D64 - Altruism
G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General
M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M14 - Corporate Culture; Social Responsibility
Sets: Departments > Accounting
Collections > Economists Online
Date Deposited: 17 Oct 2016 13:38
Last Modified: 20 Feb 2019 12:00
URI: http://eprints.lse.ac.uk/id/eprint/68059

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