The Value of Corporate Social Responsibility : Evidence from the Humidifier Disinfectant Scandal in Korea

다국어 초록 (Multilingual Abstract)

We conduct quasi-natural experiments to examine the effects of corporate social responsibility (CSR) on firms' stock performance amid corporate scandals closely linked with environmental and social issues. We find that firms with higher environmental and social (ES) ratings, especially those with higher S ratings show higher stock performance during the humidifier disinfectant scandal. We also find similar results using firms experiencing Volkswagen scandal in additional tests. Our findings reveal that CSR is influential over stock performance when investors pay significant attention to environmental and social issues, suggesting that firms’ investments in CSR significantly mitigate their nonfinancial risk.

목차 (Table of Contents)

• Abstract
• 1. Introduction
• 2. Humidifier disinfectant scandal
• 3. Data and methodology
• 3.1 Sample and Variables
• 3.2 Descriptive statistics
• 3.3 Empirical design
• 4. Empirical Results
• 4.1 Univariate analysis
• 4.2 Regression estimates
• 4.3 Components of CSR and ESG
• 5. Additional evidence from Volkswagen Scandal
• 6. Conclusion
• References
• Appendix