Corporate Social Responsibility and Firm Value: The Mediating Role of Investor Recognition

The study is to examine the mediating effect of investor recognition on the relationship between CSR and firm value. Data on companies listed on the Taiwan Stock Exchange between 2010 and 2013 were taken from Taiwan Economic Journal Data Bank (TEJ) and the CSR database developed by Chen and Hung (2013). Using partial least square analysis, we found that (i) significant positive effects between CSR and investor recognition, investor recognition and firm value, and finally CSR and firm value; (ii) when investor recognition is treated as a mediator, there is a mediating effect; and (iii) this mediating effect is a full mediation. The study helps to link CSR to firm value and reveals the crucial role of investor recognition as a mediator, thereby clarifying the indistinct relationship between CSR and firm value in existing literature.