European Corporate Governance Institute Prize For Financial Crisis Paper

The paper, co-authored with Karl Lins, Professor of Finance, University of Utah, and Ane Tamayo, Professor of Accounting, London School of Economics, examines the link between a firm’s social capital, measured by its Corporate Social Responsibility (CSR) activities, and its performance during the financial crisis. The study found that high-CSR firms experienced higher stock returns, profitability, sales growth, and sales per employee during the 2008-2009 financial crisis. It suggests that the trust between the firm, 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.