The Angel-Halo Effect: How Increases in Corporate Social Responsibility and Irresponsibility Relate to Firm Performance

Executive Summary

Recognizing that corporations can act responsibly and irresponsibly simultaneously, the researchers studied the financial impact of CSR and irresponsibility, both in isolation and in combination. 

The study finds that CSR significantly improves:

  • profitability
  • management efficiency
  • market valuation

On the other hand, corporate irresponsibility has a marginal effect on damaging profitability only — and no significant effect on damaging management efficiency or market valuation.

When a firm acts both responsibly and irresponsibly simultaneously, the study confirms the “halo-effect” because the positive impact of CSR on financial performance outweighs the negative impact of acting irresponsibly.

Research Notes
Publication Date



European Business Review


Kent Walker, Zhou Zhang, Bing Yu

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