Corporate Social Responsibility and Market Efficiency: Evidence from ESG and Misvaluation Measures

Autor:	Kim J. Heyden, Yannik Bofinger, Björn Rock
Rok vydání:	2020
Předmět:	History Valuation effects Polymers and Plastics Financial economics Corporate governance Enterprise value Industrial and Manufacturing Engineering Shareholder Corporate social responsibility Business Business and International Management Market sentiment Stakeholder theory Valuation (finance)
Zdroj:	SSRN Electronic Journal.
ISSN:	1556-5068
DOI:	10.2139/ssrn.3571211
Popis:	We study the impact of corporate social responsibility (CSR) on firm misvaluation in the US. Our results indicate that a firm's Environmental, Social and Governance (ESG) profile significantly affects valuation: an improvement of a firm's CSR leads to a higher ratio of actual to true firm value. Analyzing the relation between ESG and misvaluation separately, we find that ESG expands existing overvaluation whereas it reduces undervalued firms' deviation from the true value. We argue that both valuation effects are attributable to the worldwide trend of sustainable investing. Further analyses reveal a moderating role of market sentiment towards sustainability in the ESG-misvaluation relationship. Our findings suggest that firms‘ CSR is indeed perceived as valuable by shareholders and supports stakeholder theory's view in considering CSR as beneficial.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::abbb479f6382fc960ec427477de4ef06 https://doi.org/10.2139/ssrn.3571211 Zobrazit plný text záznamu