Abstract:
For the past 3 decades in interest in Corporate Social Responsibility (CSR) has grown tremendously. The research on this topic has focused in many directions but always ended up with contradictory results.
The purpose of this thesis is to explore relationship between investments in CSR and crisis periods and to determine whether those investments can act as a buffer for firms during market crashes and crisis periods. This link has not been explored extensively, hence the interest to this topic, as it will add to the ongoing research on CSR benefits.
The thesis employed the event study methodology to determine the impact of index top crashes on the firms that invested in CSR and those that did not. The thesis used the most recent sample of 2010-2016 years to test its hypotheses.
The results were in favour of the hypotheses i.e. firms that invested in CSR suffered significantly lower return declines on the crash dates than those that did not. The results imply that investments in CSR are not just a popular trend but can actually as a buffer for firms during crisis periods and do bring the impeccable benefits for for shareholders.
