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Cited by 3,794Corporate Social Responsibility ReportingCorporate Identity and ReputationCorporate Finance and Governance

Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis

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LINS, KARL V., SERVAES, HENRI, TAMAYO, ANE·2017·The Journal of Finance
DOI 10.1111/jofi.12505
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Abstract

ABSTRACT During the 2008–2009 financial crisis, firms with high social capital, as measured by corporate social responsibility (CSR) intensity, had stock returns that were four to seven percentage points higher than firms with low social capital. High‐CSR firms also experienced higher profitability, growth, and sales per employee relative to low‐CSR firms, and they raised more debt. This evidence suggests that the trust between a firm and both its stakeholders and investors, built through investments in social capital, pays off when the overall level of trust in corporations and markets suffers a negative shock.

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  • Lins et al. (2017) show that firms with high social capital had 4%-7% higher stock returns than firms with low social capital during the 2008-2009 financial crisis.

    “Lins, Servaes, and Tamayo (2017) show that firms with high social capital as measured by CSR intensity have 4%–7% higher stock returns than firms with low social capital during the 2008–2009 financial crisis.”

    From Sustainable mutual fund performance and flow in the recent years through the COVID-19 pandemic (2022) · cites this paper as Lins, Servaes, and Tamayo (2017)

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Research works printed but not linked: 7

  1. Coleman, James S., 1990, Foundations of Social Theory (Harvard University Press, Cambridge, MA).
  2. Dasgupta, Partha, 1988, Trust as a commodity, in Diego Gambetta, ed.: Trust: Making and Break- ing Cooperative Relations (Basil Blackwell, Oxford, UK).
  3. Fukuyama, Francis, 1995, Trust (Free Press, New York, NY).
  4. Gambetta, Diego, 1988, Can we trust trust? in Diego Gambetta, ed.: Trust: Making and Breaking Cooperative Relations (Basil Blackwell, Oxford, UK).
  5. La Porta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert W. Vishny, 1997, Trust in large organizations, American Economic Review Papers and Proceedings 87, 333-338.
  6. Porter, Michael E., and Mark R. Kramer, 2011, Creating shared value, Harvard Business Review 89, 1-17.
  7. Putnam, Robert D., 1993, Making Democracy Work: Civic Traditions in Modern Italy (Princeton University Press, Princeton, NJ).

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Authors
LINS, K. V., SERVAES, H., & TAMAYO, A.
Affiliations
  • University of Utah (US)
  • The University of Sydney (AU)
ORCID
Venue
The Journal of Finance
Publisher
Wiley
Published
2017-05-09
Volume
72
Issue
4
Pages
1785-1824
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/jofi.12505
OpenAlex
W2785606188
Cited by
3,794
References
52
Citations by year
2026: 584 · 2025: 660 · 2024: 628 · 2023: 503 · 2022: 480 · 2021: 351 · 2020: 283 · 2019: 146 · 2018: 110 · 2017: 36 · 2016: 6 · 2015: 3 · 2014: 1 · 2013: 2 · 2012: 1
FWCI
312.91
Type
journal article
Language
en
Open access
Licence
onlinelibrary.wiley.com/termsAndConditions#vor (vor)
Locations
  • The Journal of Finance (publishedVersion)
  • London Business School Research Online (London Business School) (submittedVersion)
  • London School of Economics and Political Science Research Online (London School of Economics and Political Science) (submittedVersion)
  • London School of Economics and Political Science Theses Online (London School of Economics and Political Science) (submittedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Funders
Strong
Topics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Social Responsibility Reporting
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Identity and Reputation
  • Social Sciences › Business, Management and Accounting › Accounting › Corporate Finance and Governance
Keywords
social capital, corporate social responsibility, trust, firm performance, 2008 financial crisis, stock returns, profitability, business growth, sales per employee, debt financing, stakeholder trust, investor confidence

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