This paper investigates the impact of Corporate Social Responsibility (CSR) on Corporate Financial Performance (CFP) in the United States and Europe between 2008-2017. Analyzing the top firms from the Globe Reptrack 100, the biggest study on corporate reputation worldwide, the paper puts forward evidence supporting stakeholder theory as well as CSR’s impact on earnings on both continents. The paper measures financial performance using the natural log of Net Income and Corporate Social Responsibility using CSR Hub data. Its findings both agree with and contradict the predominant literature. It concurs with the literature in its support of Stakeholder Theory as CSR is shown to be a positive indicator of financial performance. It diverges from the literature in that American firms are more highly rewarded for CSR investment than their European counterparts.
This paper examines Environmental, Social, and Governance (ESG) ratings and their correlation to the stock price of 59 US financial firms. The ESG ratings used were from CSRHub and the company stock prices were from yahoo.finance.com taken on a monthly basis for four years spanning from August 2014 to July 2018. An empirical model based on panel data was used to determine whether each rating category had a positive or negative effect on a company’s stock price. The data was conclusive in showing that the environmental, governance, and subcategory of employees had a positive impact on company stock price, and the overall social rating and the subcategory community rating had a negative impact on company stock price.