Abstract:

This paper aims at exploring the relationship between corporate social responsibility and firm value, by using a sample of companies listed on the New York Stock Exchange and NASDAQ Stock Market, over 2008-2011. Corporate social responsibility was proxied by Corporate Social Responsibility Index (CSRI) developed by Boston College Center for Corporate Citizenship and Reputation Institute, whilst Tobin’s Q ratio adjusted according to activity sector was employed as measure towards firm value. By estimating panel data regression models, unbalanced, both without cross-sectional effects and fixed effects, our results provide support for a positive relationship between corporate social responsibility and firm value. The empirical evidence is supported by the instrumental stakeholder theory since the companies involved in corporate social responsibility undertakings use in a more effective way the resources in order to satisfy the manifold needs related to stakeholders.