Do Investors Appreciate Information about Corporate Social Responsibility? Evidence from the Polish Equity Market

The results of extensive research indicate that there is a positive relation between corporate social responsibility (CSR) and financial results of companies. Investors should focus on the companies which represent high CSR standards. Changes in the level of these standards is important information from investors' point of view because these changes tend to be reflected in the share price and, consequently, in the rate of return. The research applying the event study methodology was conducted to determine how the inclusion or exclusion of the companies operating on the Warsaw Stock Exchange (WSE) from the ethical RESPECT Index affects the rate of return on their shares. The results confirm that investors on emerging markets also take into account the information about changes in the level of corporate social responsibility and respond positively to its growth and negatively to its decline. The same pattern of the invertors' reaction is observed on more mature markets. The obtained results not only contribute to the development of theory, but also have significant practical implications. They show that the presence in the ethical index helps to communicate higher standards of corporate social responsibility. Indicating it to investors may exert an impact on the company's market value.