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Research Article

EEO. 2021; 20(2): 760-766

Do the individual investors care about corporate social responsibility?

Kaleem Ullah*, Shahid Jan Kakakhel, Shakeel Khan, Bushra Zulfiqar, Imran Khan, Muhammad Kamran Khan.


Nowadays there is an urge that a company activities and responsibilities having an impact on the environment, termed as corporate social responsibility activities must be disclosed to its stakeholders. This study investigates how investment decisions of an investor are affected by the notion of Corporate Social Responsibility (CSR). Data was collected through a questionnaire, circulated to a representative sample (n=475) of Pakistani stock exchange investors. In this study descriptive stat, correlation and regression are used for analysis. Our results show that behavioral biases significantly affect the investment decisions of an individual investor. Findings show that high CSR involvement firms tend to over-invest. We demonstrate that both Defend and Prospect strategies can mitigate over-investment by interacting with high CSR firms. The results show that firms CSR strategy plays an important role in shaping investment behavior of the investors. Further analysis can use psychological bias and other accounting data metrics such as Earning per Share (EPS) to assess other behavior in investment decision-making.

Key words: Behavioral finance, corporate social responsibility, investment decision

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