CORPORATE SOCIAL RESPONSIBILITY AND FIRM VALUATION

The present study pursues an investigation to establish a relation between corporate social responsibilities policies and financial valuation of companies in the long-term horizon. Following previous literature that investigate the impact of corporate social responsibility policies on financial valuation of firms, this research study adds more information to the topic. Therefore, it is analysed a sample of 530 firms from the Euronext Stock Exchange and London Stock Exchange between 2013 and 2019. To obtain the results for this research, it is performed an ordinary least squares regression with the support of the Stata statistical software. In addition to this, the market-based measure Tobin’s Q is selected as the dependent variable to calculate the financial performance in the long-term. The data collected for this investigation is from the Thomson Reuters Eikon Database. The results suggest a positive impact of corporate social responsibility policies on financial valuation. By analysing the regression model with all the variables selected, firms that engage on investments in corporate social responsibility measures are able to achieve higher levels of financial performance in the long-term. To sum up, this empirical work provides evidence of the importance of corporate social responsibilities on companies’ financial valuation.