Abstract

GARCIA-DE-MADARIAGA, Jesús  and  RODRIGUEZ-DE-RIVERA-CREMADES, Fernando. Corporate social responsibility and the classical theory of the firm: Are both theories irreconcilable?. Innovar [online]. 2010, vol.20, n.37, pp.5-19. ISSN 0121-5051.

There has been a lot of discussion about corporate social responsibility (CSR) during these last decades. Neoclassical authors support the idea that CSR is not compatible with the objective of profit maximization, and defenders of CSR argue that, in these times of globalization and network economies, the idea of a company managed just to meet shareholders' interests does not support itself. However, beyond this discussion, how can CSR affect firms' market value? If we found a positive relationship between these variables, we could conclude that the two theories are reconcilable and the objective of profit maximization, perhaps, should satisfy not only shareholders' interests, but also stakeholders'. We review previous literature and propose a model to analyze how CSR affects firms' market value.

Keywords : corporate social responsibility; classical theory of firms; stakeholders; market value.

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