Corporate Social Responsibility, Foreign Direct Investment, and Shareholder Value

We investigate the impact CSR on the shareholder wealth effects of FDI announcements during 2003-2014 using a sample of 2,488 firms from 48 home countries investing into 121 host countries. We find that firms with superior CSR performance do not experience a significant stock market reaction to FDI announcements. Hence, we do not find empirical support for either the stakeholder value maximization view or the shareholder expense view of CSR. We propose explanations for the lack of a significant share price reaction.