Post-innovation CSR Performance and Firm Value

Abstract Analyzing a sample of 13,917 US firm–years from 1991 to 2006, we find that more innovative firms demonstrate high corporate social responsibility (CSR) performance subsequent to a successful innovation. These high-CSR innovative firms enjoy significantly higher valuation post-innovation. These findings imply that firms with demonstrated potential growth opportunities, as evident from the number of registered patents and their citations, benefit by strategically investing more in CSR activities; that is, CSR investment entails ‘doing well by [strategically] doing good.’

[1]  I. Ioannou,et al.  London Business School , 2011 .

[2]  Jörg Andriof,et al.  Unfolding Stakeholder Engagement , 2017 .

[3]  Xuan Tian,et al.  Do Anti-Takeover Provisions Spur Corporate Innovation? A Regression Discontinuity Analysis , 2017 .

[4]  Jongchul Park,et al.  Corporate social responsibilities, consumer trust and corporate reputation: South Korean consumers' perspectives , 2014 .

[5]  S. Hegde,et al.  Do Patented Innovations Affect Cost of Equity Capital , 2014 .

[6]  I. Ioannou,et al.  Corporate Social Responsibility and Access to Finance , 2011 .

[7]  R. Faff,et al.  Do high and low-ranked sustainability stocks perform differently? , 2013 .

[8]  R. Faff,et al.  An Empirical Study of the World Price of Sustainability , 2013 .

[9]  Jun-Koo Kang,et al.  Corporate Social Responsibility and Stakeholder Value Maximization: Evidence from Mergers , 2013 .

[10]  Yelena Larkin.  Brand Perception, Cash Flow Stability, and Financial Policy , 2013 .

[11]  Thomas J. Chemmanur.  Do AntiTakeover Provisions Spur Corporate Innovation ? , 2012 .

[12]  Albert H. C. Tsang,et al.  Voluntary Nonfinancial Disclosure and the Cost of Equity Capital: The Initiation of Corporate Social Responsibility Reporting , 2011 .

[13]  Gordon S. Roberts,et al.  The impact of corporate social responsibility on the cost of bank loans , 2011 .

[14]  Nihat Aktas,et al.  Do Financial Markets Care about SRI? Evidence from Mergers and Acquisitions , 2010 .

[15]  Dirk Michael Boehe,et al.  Corporate Social Responsibility, Product Differentiation Strategy and Export Performance , 2010 .

[16]  Omrane Guedhami,et al.  Does Corporate Social Responsibility Affect the Cost of Capital? , 2010 .

[17]  J. Galán,et al.  The Effect of R&D Intensity on Corporate Social Responsibility , 2010 .

[18]  Haas,et al.  Corporate Social Responsibility as Reputation Insurance: Theory and Evidence , 2010 .

[19]  Birgitte Als.  CSR-DRIVEN INNOVATION - Combining design and business in a profitable and sustainable way , 2010 .

[20]  Jean Tirole,et al.  Individual and Corporate Social Responsibility , 2010, SSRN Electronic Journal.

[21]  Charles J. Hadlock,et al.  New Evidence on Measuring Financial Constraints: Moving Beyond the KZ Index , 2009 .

[22]  Kim Langfield-Smith,et al.  Revisiting the Vexing Question: Does Superior Corporate Social Performance Lead to Improved Financial Performance? , 2009 .

[23]  Robert W. Faff,et al.  Corporate Sustainability Performance and Idiosyncratic Risk: A Global Perspective , 2009 .

[24]  Murillo Campello,et al.  The Real Effects of Financial Constraints: Evidence from a Financial Crisis , 2009 .

[25]  M. Halme,et al.  Philanthropy, Integration or Innovation? Exploring the Financial and Societal Outcomes of Different Types of Corporate Responsibility , 2009 .

[26]  Sandra Rothenberg,et al.  ENVIRONMENTAL PERFORMANCE AS A DRIVER OF SUPERIOR QUALITY , 2003 .

[27]  Xuan-Thao Nguyen,et al.  Acquiring Innovation , 2008 .

[28]  Chendi Zhang,et al.  The price of ethics and stakeholder governance: The performance of socially responsible mutual funds , 2008 .

[29]  W. Mitchell,et al.  A Model of Corporate Philanthropy , 2008 .

[30]  C. L. Chieng,et al.  The Corporate Social Responsibility of Pharmaceutical Product Recalls: An Empirical Examination of U.S. and U.K. Markets , 2007 .

[31]  Thomas Brambor,et al.  Understanding Interaction Models: Improving Empirical Analyses , 2006, Political Analysis.

[32]  Janet Kiholm Smith,et al.  Corporate Philanthrophic Practices , 2003 .

[33]  L. L. Rodrigues,et al.  Corporate Social Responsibility and Resource-Based Perspectives , 2006 .

[34]  Marcin T. Kacperczyk,et al.  The Price of Sin: The Effects of Social Norms on Markets , 2006 .

[35]  Abagail McWilliams,et al.  Corporate Social Responsibility: Strategic Implications , 2006 .

[36]  John L. Campbell.  Why would corporations behave in socially responsible ways? an institutional theory of corporate social responsibility , 2007 .

[37]  David Chandler,et al.  Strategic corporate social responsibility as global brand insurance , 2005 .

[38]  Chris Brooks,et al.  Corporate Social Performance and Stock Returns: UK Evidence from Disaggregate Measures , 2005 .

[39]  Bronwyn H Hall,et al.  Market value and patent citations , 2005 .

[40]  Linda S. Munilla,et al.  Innovation, Ethics, and Entrepreneurship , 2004 .

[41]  Alma Cohen,et al.  What Matters in Corporate Governance? , 2004 .

[42]  Rob Bauer,et al.  The Eco-Efficiency Premium Puzzle , 2004 .

[43]  Wei Jiang,et al.  The Rodney L. White Center for Financial Research Price Informativeness , 2005 .

[44]  F. Schmidt,et al.  Corporate Social and Financial Performance: A Meta-Analysis , 2003 .

[45]  Linda S. Munilla,et al.  The Constant Gardener Revisited: The Effect ofSocial Blackmail on the Marketing Concept,Innovation, and Entrepreneurship , 2002, Journal of business ethics : JBE.

[46]  M. Porter,et al.  The competitive advantage of corporate philanthropy. , 2002, Harvard business review.

[47]  G. Dowling,et al.  Corporate reputation and sustained superior financial performance , 2002 .

[48]  Jörg Andriof,et al.  Unfolding Stakeholder Thinking: Theory, Responsibility and Engagement , 2002 .

[49]  Rob Bauer,et al.  International Evidence on Ethical Mutual Fund Performance and Investment Style , 2002 .

[50]  A. Kraus,et al.  The Effect of Green Investment on Corporate Behavior , 2001, Journal of Financial and Quantitative Analysis.

[51]  Maureen O'Hara,et al.  Information and the Cost of Capital , 2001 .

[52]  Ethan B. Kapstein,et al.  The corporate ethics crusade , 2001 .

[53]  T. Feddersen,et al.  Saints and Markets: Activists and the Supply of Credence Goods , 2001 .

[54]  A. Hillman,et al.  Shareholder value, stakeholder management, and social issues: what's the bottom line? , 2001 .

[55]  Abagail McWilliams,et al.  Corporate Social Responsibility: a Theory of the Firm Perspective , 2001 .

[56]  Michael J. Lenox,et al.  Does It Really Pay to Be Green? An Empirical Study of Firm Environmental and Financial Performance: An Empirical Study of Firm Environmental and Financial Performance , 2001 .

[57]  Baruch Lev,et al.  Information Asymmetry, R&D, and Insider Gains , 2000 .

[58]  Stuart L. Hart,et al.  Do Corporate Global Environmental Standards Create or Destroy Market Value , 2000 .

[59]  Abagail McWilliams,et al.  Corporate social responsibility and financial performance: correlation or misspecification? , 2000 .

[60]  R. Klassen,et al.  The Impact of Environmental Technologies on Manufacturing Performance , 1999 .

[61]  Shawn L. Berman,et al.  Does Stakeholder Orientation Matter? The Relationship Between Stakeholder Management Models and Firm Financial Performance , 1999 .

[62]  Peter A. Soyka,et al.  Does Improving a Firm's Environmental Management System and Environmental Performance Result in a Higher Stock Price? , 1997 .

[63]  Jesus Saa-Requejo,et al.  Financial Constraints and Stock Returns , 1997 .

[64]  Samuel B. Graves,et al.  The corporate social performance-financial performance link , 1997 .

[65]  S. Kaplan,et al.  Do Investment-Cash Flow Sensitivities Provide Useful Measures of Financing Constraints? , 1997 .

[66]  Stuart L. Hart,et al.  DOES IT PAY TO BE GREEN? AN EMPIRICAL EXAMINATION OF THE RELATIONSHIP BETWEEN EMISSION REDUCTION AND FIRM PERFORMANCE , 1996 .

[67]  Michael E. Porter,et al.  Green and Competitive : Ending the Stalemate , 1996 .

[68]  T. Jones.  INSTRUMENTAL STAKEHOLDER THEORY: A SYNTHESIS OF ETHICS AND ECONOMICS , 1995 .

[69]  J. Francis,et al.  Agency costs and innovation some empirical evidence , 1995 .

[70]  C. Fershtman,et al.  Insider Trading and the Managerial Choice among Risky Projects , 1994, Journal of Financial and Quantitative Analysis.

[71]  M. Statman,et al.  Doing Well While Doing Good? The Investment Performance of Socially Responsible Mutual Funds , 1993 .

[72]  M. Freedman,et al.  Differences in Social‐Cost Disclosures: A Market Test of Investor Reactions , 1991 .

[73]  C. Fombrun,et al.  What's in a Name? Reputation Building and Corporate Strategy , 1990 .

[74]  Jeremy C. Stein,et al.  Takeover Threats and Managerial Myopia , 1988, Journal of Political Economy.

[75]  Partha Dasgupta,et al.  Economic policy and technological performance , 1987 .

[76]  A. Pakes,et al.  The Value of Patents as Indicators of Inventive Activity , 1986 .

[77]  J. Hirshleifer.  The Private and Social Value of Information and the Reward to Inventive Activity , 1971 .

[78]  E. Chamberlin.  The Theory of Monopolistic Competition , 1933 .