Does CSR Improve Financial Performance? Reevaluating Evidence from Close-Call Resolutions

Scholars have long sought to understand the causal relationship between Corporate Social Responsibility (CSR) and financial performance. A notable innovation in this quest was the use of regression discontinuity designs (RDD) to infer causality by examining how investors respond to close-call passage of resolutions to increase firms’ CSR commitments. Two influential studies reported that investors expected such resolutions to boost the focal firm’s prospects while diminishing those of competitors. However, the rarity of CSR resolutions left those findings reliant on few observations near the voting threshold, raising concerns about whether the conditions required for valid RDD-based causal inference are satisfied. In addition, prior work identified resolution passage using a simple majority rule, whereas actual company voting policies may impose different approval requirements. Finally, a subsequent study covering a different period found no significant market reaction. We replicate and extend all three analyses, re-examining their original samples before broadening the time horizon and applying company-specific passage rules. Across specifications, we find no consistent evidence that investors revalue firms, positively or negatively, following the passage of CSR resolutions. Our results offer a clearer view of the CSR-performance link and highlight both the promise and peril of regression discontinuity designs.