CORPORATE SOCIAL RESPONSIBILITY LEVELS AND FIRM PERFORMANCE: EVIDENCE FROM COUNTRIES IN CRISIS

In times of economic downturn it is of utmost importance for companies to find alternative ways to enhance their value while disregarding all activities that have the potential to destroy value. Corporate Social Responsibility (CSR) disclosures inform analysts and investors about companies ‟ ethical accountability and engagement towards society, possibly contributing to the overall value of a company. This paper examines the rapport between different levels of CSR disclosure and stock market performance, analyzing a sample comprised by companies from Portugal, Spain and Italy, given that these are some of the countries most affected by the 2008 financial crisis. The period covered ranges from 2008 to 2012. CSR disclosure levels are measured through the Global Reporting Initiative (GRI) guidelines. Results unveil that markets value a low CSR disclosure negatively, but do not find other levels of disclosure to add value, which implies that in times of crisis a low CSR disclosure may increase information asymmetry between a company and market participants. Furthermore, an analysis of the changes in GRI reveals the existence of a positive relation between stock market returns and upward changes in CSR disclosure levels