Volume 49, Issue 2 p. 272-298
Original Article

Corporate Social Responsibility, Product Strategy, and Firm Value

Eunho Cho

Corresponding Author

Eunho Cho

Accounting and Finance Department, North Carolina A&T State University, United States

*Corresponding author: Accounting and Finance Department, North Carolina A&T State University, 1601 East Market Street, Greensboro, NC 27411, United States. Tel: +1-336-285-3357, email: echo@ncat.edu.

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Albert Tsang

Albert Tsang

School of Accounting and Finance, Hong Kong Polytechnic University, Hong Kong

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First published: 12 April 2020
Citations: 12

Abstract

This study examines the role of a firm’s product strategy on the relationship between corporate social responsibility (CSR) and firm value. Using a sample of 1287 firm-year observations of Korean listed manufacturing firms from 2005 to 2016, we find that a firm’s product differentiation strategies strengthen the association between CSR and firm value, whereas cost-leadership strategies weaken such a relationship. Our findings demonstrate the importance of attaining a strategic fit between CSR activities and product strategies, and highlight the importance of considering a firm’s product strategy when evaluating a firm’s CSR investment.

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