AI Article Synopsis
- The COVID-19 pandemic in Korea highlights the impact of corporate social responsibility (CSR) on stock returns and investor behavior during tough economic times.
- Studies show that firms with strong CSR reputations achieve higher stock returns and experience lower volatility compared to those without CSR.
- Institutional investors, like pension funds, are more likely to sell off non-CSR stocks, suggesting they view CSR as a way to reduce risk in their portfolios.
Article Abstract
The COVID-19 pandemic in Korea provides grounds for understanding the effect of corporate social responsibility (CSR) on the stock returns and trading behavior of investors, particularly when most businesses have fallen on hard times. This study empirically finds that CSR reputations are associated with higher returns and lower volatilities by comparing the two portfolios which are composed of CSR and non-CSR firms, respectively. We also discover that public pension funds and other institutional investors have liquidated non-CSR stocks more aggressively than CSR stocks. This indicates that institutional investors consider CSR to transform their stock portfolios into less risky ones.
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Source |
|---|---|
| http://www.ncbi.nlm.nih.gov/pmc/articles/PMC8720270 | PMC |
| http://dx.doi.org/10.1016/j.frl.2021.102660 | DOI Listing |
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