Investors are unwilling to pay for corporate social responsibility activities: Evidence from India’s Companies Act 2013

Parinduri, Rasyad and Paul, Saumik (2015): Investors are unwilling to pay for corporate social responsibility activities: Evidence from India’s Companies Act 2013.

Abstract

We examine the effects of corporate social responsibility (CSR) activities on the values of firms. Using a non-parametric regression discontinuity design, exploiting a natural experiment induced by India’s Companies Act 2013, we find investors devalue the stocks of firms that do CSR activities by 2-5%, which suggests investors are unwilling to pay for CSR activities.

• Item Type: MPRA Paper
• Language: English
• Keywords: corporate social responsibility, firm objectives, firm values
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L21 - Business Objectives of the Firm; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M14 - Corporate Culture ; Diversity ; Social Responsibility

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