Philipp Krüger studies how stock markets react to corporate social responsibility (CSR) events. He finds that investors respond strongly negatively to negative CSR events and weakly negatively to positive ones. Investors value "offsetting CSR," where positive CSR news relates to firms with poor stakeholder relations. Positive CSR news from firms with agency problems is viewed negatively. CSR news with strong legal and economic information content generates stronger investor reactions. The paper provides event study evidence on CSR's impact on shareholder value using data from KLD. It addresses measurement error and reverse causality issues. Negative CSR events lead to significant stock price declines, indicating substantial costs of social irresponsibility. Positive CSR events have weaker negative reactions, suggesting CSR may not always benefit shareholders. However, positive CSR news from firms offsetting past irresponsibility is viewed more favorably. The paper shows that CSR events with strong legal and economic information content generate stronger investor reactions. It also finds that high-leverage and low-liquidity firms with positive CSR events have higher abnormal returns. The study highlights the importance of distinguishing between agency-motivated and value-enhancing CSR. The results support the view that CSR can be detrimental to shareholder value when driven by agency problems, but beneficial when firms address past irresponsibility. The paper contributes to the literature on CSR and shareholder value by providing unique event study evidence and addressing methodological challenges.Philipp Krüger studies how stock markets react to corporate social responsibility (CSR) events. He finds that investors respond strongly negatively to negative CSR events and weakly negatively to positive ones. Investors value "offsetting CSR," where positive CSR news relates to firms with poor stakeholder relations. Positive CSR news from firms with agency problems is viewed negatively. CSR news with strong legal and economic information content generates stronger investor reactions. The paper provides event study evidence on CSR's impact on shareholder value using data from KLD. It addresses measurement error and reverse causality issues. Negative CSR events lead to significant stock price declines, indicating substantial costs of social irresponsibility. Positive CSR events have weaker negative reactions, suggesting CSR may not always benefit shareholders. However, positive CSR news from firms offsetting past irresponsibility is viewed more favorably. The paper shows that CSR events with strong legal and economic information content generate stronger investor reactions. It also finds that high-leverage and low-liquidity firms with positive CSR events have higher abnormal returns. The study highlights the importance of distinguishing between agency-motivated and value-enhancing CSR. The results support the view that CSR can be detrimental to shareholder value when driven by agency problems, but beneficial when firms address past irresponsibility. The paper contributes to the literature on CSR and shareholder value by providing unique event study evidence and addressing methodological challenges.