Sustainable Development Goals
Abstract/Objectives
The article argues that corporate social responsibility (CSR) investments act as an intangible asset that helps companies maintain relationships with stakeholders, providing protection against external disruptions like natural disasters. Through a difference-in-differences analysis of manufacturing firms, the study finds that those with higher CSR ratings demonstrate better operational performance during major disasters. Two key mechanisms enabling this resilience are identified: motivated employees and loyal customers. The evidence indicates that CSR investments enhance employee motivation, resulting in increased productivity after disasters, while also fostering customer loyalty, which leads to more stable sales. Overall, CSR is shown to be a critical factor in helping manufacturing firms navigate the challenges posed by significant disruptions.
Results/Contributions

We propose that corporate social responsibility (CSR) investment serves as an intangible investment in stakeholder relationships to guard against external disruptions to firms' operations and tangible assets. Using a difference-in-differences setting and a database of factory locations, we show that manufacturing firms with higher CSR ratings are much less affected by major natural disasters in terms of operating performance. We then propose two mechanisms through which CSR engagement shields manufacturing firms against external disruptions: employee motivation and customer loyalty. Empirical evidence suggests that CSR helps manufacturing firms survive major natural disasters by motivating employees, which leads to higher post-disaster productivity, and keeping customers, which leads to more stable post-disaster sales.

Keywords
Natural disastersCorporate social responsibilityOperating performanceSustainabilityCustomer loyaltyEmployee satisfaction
References
1. https://doi.org/10.1016/j.jcorpfin.2024.102675

Corporate social responsibility and external disruptions

Contact Information
許博炫
pohsuanhsu@mx.nthu.edu.tw