Philipp Krüger's paper, "Corporate Goodness and Shareholder Wealth," examines how stock markets react to positive and negative events related to a firm's corporate social responsibility (CSR). The study uses a unique dataset of 2,116 corporate events with implications for stakeholders, focusing on the short-term reactions of investors. Key findings include: 1. **Negative Events**: Investors strongly react negatively to negative CSR events, particularly those concerning communities and the environment. The median cost of negative CSR is approximately $76 million. 2. **Positive Events**: Investors respond slightly negatively to positive CSR news, with reactions being more pronounced for events involving high leverage and low liquidity firms, as well as for firms with a history of poor stakeholder relations. 3. **Offsetting CSR**: Positive CSR events that are likely to offset previous corporate social irresponsibility are received more positively by shareholders. 4. **Textual Analysis**: Events with stronger legal and economic information content generate a more pronounced investor reaction. The paper also addresses methodological concerns such as measurement error and reverse causality, providing insights into the measurement and value implications of CSR. The findings suggest that CSR can have both positive and negative impacts on shareholder value, depending on the context and the firm's motives for engaging with stakeholders.Philipp Krüger's paper, "Corporate Goodness and Shareholder Wealth," examines how stock markets react to positive and negative events related to a firm's corporate social responsibility (CSR). The study uses a unique dataset of 2,116 corporate events with implications for stakeholders, focusing on the short-term reactions of investors. Key findings include: 1. **Negative Events**: Investors strongly react negatively to negative CSR events, particularly those concerning communities and the environment. The median cost of negative CSR is approximately $76 million. 2. **Positive Events**: Investors respond slightly negatively to positive CSR news, with reactions being more pronounced for events involving high leverage and low liquidity firms, as well as for firms with a history of poor stakeholder relations. 3. **Offsetting CSR**: Positive CSR events that are likely to offset previous corporate social irresponsibility are received more positively by shareholders. 4. **Textual Analysis**: Events with stronger legal and economic information content generate a more pronounced investor reaction. The paper also addresses methodological concerns such as measurement error and reverse causality, providing insights into the measurement and value implications of CSR. The findings suggest that CSR can have both positive and negative impacts on shareholder value, depending on the context and the firm's motives for engaging with stakeholders.