Corporate social responsibility and firm value: Evidence from the Korean manufacturing industry

  • Daeheon Choi
  • Chune Young Chung
  • Sangjun Jung
  • Kyung Soon Kim
  • Jason Young


Background: Corporate social responsibility (CSR) is drawing increased attention, with many believing that in addition to being used to improve corporate image, it should be a primary competitive strategy. From this perspective, this study aims to examine the effect of CSR on firm value. Methods: The data are based on all firms listed on the KRX for the period 2005 to 2015 that have publicly available CSR information. Here, we use the KEJI Index, which measures Korean domestic CSR, as a proxy for CSR in our empirical analysis. In addition, we use the relation between CSR and firm value to examine the Korean domestic manufacturing environment, which is influenced significantly by the global manufacturing environment. Results: We find that every corporation should adopt CSR as an active competitive strategy. The results strongly support a positive relationship between CSR activity and firm value based on the correlation between the KEJI Index and Tobin’s Q. The results also show that there are differences between firms in the manufacturing industry and those in other industries in terms of the relation between CSR and firm value. Conclusion: The empirical evidence implies that CSR has a positive effect on firm value and provides a beneficial impact of CSR in terms of the firm’s image in the market. Overall, our findings can help to guide top managers or CEOs who are considering investing in CSR.