Can CSR Shield Firm Value During a Pandemic?: Evidence of European Consumer Good Firms During the Covid-19 Pandemic

Sammanfattning: The link between corporate social responsibility (CSR) and corporate financial performance (CFP) has during the latest years received large attention, yet little clarity is provided within the topic. The crisis of the Covid­-19 pandemic caused financial markets to drop while simultaneously providing research a novel opportunity to examine the link through an exogenous event. Hence, this paper studies the relationship between pre­-crisis CSR and financial performance during the Covid­-19 pandemic with regards to three specific event dates and the year of 2020 as a whole. Using a sample of 260 European companies within the sector of consumer goods, no clear evidence of an existing link between CSR and CFP can be stated neither in the short nor the long run. Some support for a shield of financial performance can be identified for retail firms with high CSR rating during the initial phase of the pandemic. Evidence also shows that the institutional context, such as the European Union, in which a firm operates within can impact the direction of the link. To conclude, pre­-crisis CSR is not a guarantee for shielding firm value during a pandemic.