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Loai Ali Alsaid ORCID logo


This paper investigates how investments in corporate social responsibility (CSR) activities affect firm value. We categorise firms’ CSR activities as strategic or opportunistic based on consistency, and analyse the differential value relevance effect. We use the Egyptian Economic Justice Index (EEJI) as the most representative measure for firms’ CSR activities in Egypt. To measure valuation effect, we adopt an earnings response coefficient (ERC) model. Our main explanatory variables are interaction variables with unexpected earnings and two dummy variables; one indicating CSR activities, and one indicating their consistency. We document these variables as positively and negatively significant. Our findings show that investing in CSR activities consistently and strategically may increase firm’s profitability and firm value. However, firms that sporadically invest in CSR activities show a smaller relationship between unexpected earnings and stock returns than firms that consistently invest in CSR activities.

Keywords: Agency Costs, Earnings Response Coefficients, CSR Activities, Firm Value, Strategic and Opportunistic activities

How to cite this paper: Alsaid, L. (2016). Do consistent CSR activities matter for firm value? Corporate Ownership & Control, 14(1-2), 340-350.