The effect of managerial ability on corporate social responsibility and firm value in the energy industry

We investigate the role of managerial ability in the relationship between corporate social responsibility (CSR) and firm performance in the energy industry, where sustainability issues are of special interest. We first identify a positive association between CSR and firm value, which, however, disappears when considering managerial ability. Only the MA-associated components of CSR increases energy firms' value. Finally, managers with superior ability can still efficiently implement CSR activities to foster firm value during the financial crisis. Taken together, these results suggest that higher managerial ability is a crucial certification of the benefit of CSR investment, which in turn improves firm value, particularly during unstable periods.