2059: Relationship Between Firm Value, Engagements in CSiR and CSR (12712)

Unlike previous studies hitherto limited to examining one or two bi-directionality in corporate social irresponsibility (CSiR), corporate social responsibility (CSR), and firm value, we investigate all three bi-directional relationships. Therefore, we investigate the bi-di¬¬¬rectional relationship between -1) environment, social, and governance (ESG) controversies and firm value; 2) corporate social performance (CSP) and firm value; and 3) CSP and ESG controversies, utilizing a panel data set for Indian companies from 2008 to 2018. We check the optimal lag order, cross-dependence (CD), and stationarity of our variables of interest. Next, we employ a panel vector autoregressive (panel VAR) model with a system generalized method of moments (system GMM) estimation. Our results indicate three imperative findings. First, it reveals a uni-directionality of CSR engagements and value supporting good management. Second, it approves bi-directionality of CSiR engagements - value, suggesting reverse paths presence through virtuous circle. That is, a decrease in prior ESG controversies surges value, and this rise lessens ESG controversies further. Finally, our outcomes confirm bi-directionality of ESG controversies - CSP, indicating that capitalizing in earlier CSR cuts following CSiR engagements. This reduction reduces CSR engagements further.

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