Corporate social responsibility, customer satisfaction, corporate reputation, and firms’ market value: Evidence from the automobile industry

Abstract

How does corporate social responsibility (CSR) impact on firms’ market value? Academy had found it difficult to give a suitable answer to this question, considered as the “Holy Grail” of CSR. In contrast to previous research that stressed subjective measures to rate CSR performance, was multi-sector focused and encompassed short periods, we propose a different insight. Using an objective CSR performance rating (Ethical Portfolio Management [EPM] owned by EIRIS), taking a single industry—the automobile industry— and spanning 8 years, in this paper, we try to make a difference. Our results suggest that certain CSR issues—those related to corporate core business and critical stakeholders—may lead to companies’ better financial performance.