CORPORATE SOCIAL RESPONSIBILITY AND FIRM VALUATION: A STUDY BASED ON PRIVATE COMMERCIAL BANKS OF BANGLADESH

Abstract

This study explores the impact of corporate social performance on the firm valuation. Using purposive sampling method based on the availability of information to select the sample size of nine private commercial banks of Bangladesh, it reviews the existing literature. It uses 10 years’ data of the selected sample size and applies four denominators of firm valuation i.e. market value per share, book value per share, earnings per share and bank size. Multiple linear regression analysis and Karl Pearson correlation analysis are used to analyze data and test the hypotheses. This study focuses on the philanthropic portion of corporate social responsibility and suggests the authority how does users value corporate social responsibility in their decision making. The study finds that all the variables are positively associated with corporate social performance except bank size and the findings of the study suggest that corporate social performance enhances firm value irrespective of firm size.