| The purpose of the study was to investigate the effect of corporate social responsibility (CSR) activities on changes in stock prices. Prior studies have shown mixed results due to continued operational changes in business environments and fluid stakeholder expectations. In a quantitative ex post facto study, the stock prices of 42 USA-based corporations listed on the NASDAQ Biotechnology Index over a four-year period, starting with the implementation of the Sarbanes Oxley Act in 2003, were correlated with the companies' CSR expense disclosures. An examination of 10K reports generated the key indicators used to measure comprehensive CSR programs, namely human resource, environmental, customer and supplier, community giving, and corporate governance expense disclosures. No biotechnology corporations exhibited a comprehensive CSR program; however, statistically significant relationships between customers and suppliers, human resources, and corporate governance expense disclosures and changes in stock prices were found. The role industry characteristics have on magnifying or reducing the value of CSR initiatives in different industries was also a key finding. |
