Market reaction to firms' investments in CSR projects


  • Victoria Cherkasova School of Finance, National Research University Higher School of Economics, Moscow, Russia
  • Elena Fedorova Financial University under the Government of the Russian Federation, Moscow, Russia
  • Igor Stepnov Department of Assets Management, MGIMO, Moscow, Russia


Corporate social responsibility, Excess stock return, ESG score, Additive value, Market valuation, CSR performance



The purpose of this paper is to determine the impact of corporate investments in corporate social responsibility (CSR), measured by the environmental, social and government (ESG) rating, on the market valuation of a firm's stocks and to explain the regional differences in the degree of this influence.


The empirical study uses linear and non-linear panel regression models for a panel sample of 951 firms listed in Asia, North America and Europe operating in innovative industries.


The CSR score was found to be significant in terms of stock excess return on the regional level. However, this finding cannot be extrapolated to the global scale. ESG rating is priced by the European and North American markets negatively, while in the Asian market, it is positive. This penalty (negative influence) is greater than the reward for one point increase in ESG rating.

Practical implications

The results of this empirical study could be used by firms' managers to adjust strategies aimed at stock value growth and by investors to select an investment strategy to maximize return.


The impact of investments in CSR on stock excess return over a defined benchmark is assessed. The study reveals regional differences in the impact of CSR investment using a sample of Asian, European and North American firms. The authors apply a more advanced lagged CSR performance (d.ESG) assessment based on the methodology of Zhang and Rajagopalan (2010).



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How to Cite

Cherkasova, V., Fedorova, E., & Stepnov, I. (2023). Market reaction to firms’ investments in CSR projects. Journal of Economics, Finance and Administrative Science, 28(55), 44–59. Retrieved from