# Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis

“Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis” (2017), by Karl V. Lins et al. Business and Management research paper. Original abstract below, unchanged. A free PDF is available.

- Authors: Karl V. Lins, Henri Servaes, Ane Miren Tamayo
- Published: March 19, 2017
- Field: Business and Management
- DOI: https://doi.org/10.1111/jofi.12505
- Free PDF: https://lbsresearch.london.edu/id/eprint/579/1/ServaesH_Social_Capital_September%202016_AAM.pdf

## Abstract

During the 2008–2009 financial crisis, firms with high social capital, as measured by corporate social responsibility (CSR) intensity, had stock returns that were four to seven percentage points higher than firms with low social capital. High‐CSR firms also experienced higher profitability, growth, and sales per employee relative to low‐CSR firms, and they raised more debt. This evidence suggests that the trust between a firm and both its stakeholders and investors, built through investments in social capital, pays off when the overall level of trust in corporations and markets suffers a negative shock.

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