Abstract

This study investigates the value relevance and market response of corporate social responsibility (CSR) activities from 2001 to 2010. This paper examines whether donation expenditure (proxies for CSR) is significantly related to next year’s earnings and whether Korean investors truly react to the information on CSR activities. The empirical results of this paper indicate that donation expenditure (which proxies for social contribution activities) is significantly associated with firm value and Korean market investors are fully aware of the information content of donation expenditure.

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