TITLE:
A Multi-Dimensional Analysis of Corporate Social Responsibility: Different Signals in Different Industries
AUTHORS:
Homayoon Shalchian, Kais Bouslah, Bouchra M’Zali
KEYWORDS:
Corporate Social Performance, Corporate Social Irresponsibility, Financial Performance, Portfolio Management
JOURNAL NAME:
Journal of Financial Risk Management,
Vol.4 No.2,
June
16,
2015
ABSTRACT: This study investigates the relation between individual dimensions of corporate social responsibility (CSR) and financial performance in different industries. Using Kinder, Lydenberg and Domini (KLD) social ratings, we find that investors seem to be more sensitive to the dimension “Environment” in mining and manufacturing sectors while they seem to be more sensitive to the dimension “Employees’ welfare” in the service industry. Our results also suggest that investors perceive an additional financial risk from firm’s irresponsible behavior and consequently, they are more pre-occupied by eventual losses caused by firms’ social irresponsibility than by potential financial gains from corporate social performance.