Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis

• DOI: 10.1111/jofi.12505
• Publication Date: 2017-03-19T09:22:40Z
• Authors: KARL V. LINS; HENRI SERVAES; ANE TAMAYO
• Keywords: Value (mathematics); Stock (firearms)

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