Article | Academy of Management Annual Meeting Proceedings | August 2010

The Impact of Corporate Social Responsibility on Investment Recommendations

by Ioannis Ioannou and George Serafeim

Abstract

Using a large sample of publicly traded U.S. firms over 16 years, we investigate the impact of corporate socially responsible (CSR) strategies on security analysts' recommendations. Socially responsible firms received more favorable recommendations in recent years relative to earlier ones, documenting a changing perception of such strategies by the analysts. Moreover, we find that higher visibility firms receive more favorable recommendations for their CSR strategies. We also find that analysts with more experience, broader CSR awareness, or those with more resources at their disposal, are more likely to perceive CSR strategies favorably. Our results show how CSR strategies can affect value creation in public equity markets through analyst recommendations.

Keywords: Public Ownership; Corporate Social Responsibility and Impact; Strategy; Experience and Expertise; Value Creation; Public Equity; Markets; Investment; Perception; United States;

Citation:

Ioannou, Ioannis, and George Serafeim. "The Impact of Corporate Social Responsibility on Investment Recommendations." Academy of Management Annual Meeting Proceedings (August 2010).