Corporate social responsibility and seasoned equity offerings

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We examine whether corporate social responsibility (CSR) creates value for seasoned equity issuers. Using a sample of seasoned equity offerings (SEOs) by U.S. companies between 2004 and 2013, we find a positive association between CSR performance and the stock price reaction to SEO announcements. Surprisingly, however, further tests reveal that seasoned equity issuers with high CSR scores tend to have higher post-SEO increases in cash holdings, and lower investments in real assets, than issuers with low CSR scores. Moreover, high-CSR issuers have worse post-SEO operating and stock price performance than low-CSR issuers. Together, our findings suggest that high CSR scores mislead shareholders into attributing value-increasing motives to seasoned equity issues.
Original languageEnglish
Pages (from-to)158-179
Number of pages22
JournalJournal of Corporate Finance
Publication statusPublished - 16 Mar 2018


  • Corporate social responsibility
  • Event study
  • Seasoned equity offerings
  • Shareholder value
  • Use of proceeds


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