Insurance-like Effects of Corporate Social Responsibility Performance on Stockholders and Bondholders' Wealth

摘要

Using an event study and data from Compustat Research Insight and KLD Social Index from 2000 through 2008, we examine whether CSR engagement could produce insurance-like effects on stock or bond prices when negative events occur. Our results generally support CSR engagement provides an insurance-like effect on stock prices of the firm in the face of a negative event. We also find this effect for bond prices. We further find that the effect only exists provided that corporate CSR engagement is on a long-term and continuous basis, and it will decrease with the number of negative events.