Author(s)

Yan Zhang^1*, Weiqi Liu^2,3, Lixu Xie¹

¹School of Economics and Management, Shanxi University, Taiyuan, China.
²Institute of Management and Decision, Shanxi University, Taiyuan, China.
³School of Finance, Shanxi University of Finance and Economics, Taiyuan, China.

“Can companies benefit from corporate social responsibility?” is still unsolved. This study investigates how corporate social responsibility impacts stock returns with Hexun’s CSR rating for first time. The sample is based on Chinese A-share listed companies for the period 2010-2017. We adopt threshold regression and multiple regression and find that: first, there is a U-shaped relationship between CSR and stock returns. This finding suggests that the relationship between CSR and stock return is affected by cut-off point, which is negative before cut-off point, and positive after cut-off point. In addition, this relationship has nothing to do with the nature of enterprise property rights. Second, fulfilling CSR affects corporate reputation and relieves information asymmetry, corporate reputation and institutional investors are the channels through which CSR influences stock returns. Fourth, we demonstrate the moderating effect of external legal environment between CSR and stock return. This paper provides new evidence for understanding the impact of CSR on enterprise value.

Corporate Social Responsibility, Stock Return, Corporate Reputation, Institutional Investors, External Legal Environment

Zhang, Y. , Liu, W. and Xie, L. (2020) The Nonlinear Impact of Corporate Social Responsibility on Stock Returns. Theoretical Economics Letters, 10, 17-39. doi: 10.4236/tel.2020.101002.