| Summary: | The relationship between corporate social responsibility (CSR) and corporate
performance has been a controversial topic. The COVID-19 pandemic raised a
great deal of public interest in CSR and provided a special opportunity for research
related to CSR. This study evaluates the impact of CSR on corporate performance
in the context of the COVID-19 pandemic. Result shows that the impact of CSR on
corporate performance during COVID-19 is negative. Using difference-in-differences (DID) regression, this study finds that CSR companies experienced a
significant negative decline in corporate performance during COVID-19, suggesting
that CSR activities during this crisis period resulted in overinvestment. The
estimation of the dynamic treatment effects suggests that the negative impact
caused by CSR was dynamically sustained in the post-COVID-19 crisis period. This
study further shows that such negative impact is only significant among large CSR
firms. This study is valid for a range of robustness tests.
Keywords: corporate social responsibility, firm value, pandemic, financial crisis
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