Is there a connection between a companys level of corporate social responsibility and its overall profit picture?
There’s a lot of controversy about that. Scholars don’t agree. One question is whether it’s beneficial for firms to pay attention to social issues, and by beneficial I mean in terms of increasing their market value. There could be several answers to that. Associated with social issues is social pressure, and social pressure on firms could be harmful in a lot of ways. And notice that this all “could be” harmful. Social pressure could affect the demand for your products because consumers might be pro the social issue and concerned about your performance on that dimension because of the social pressure itself. The extreme case of that is a boycott. We don’t play up boycotts, because it’s not clear that boycotts make much of a difference. The evidence isn’t there. Social pressure on you could affect how much investors are willing to pay for your shares. It could be that some investors will shun your stock and buy shares of other firms, but it could be that those investors anticipate that t
