Exploring the relationship between corporate responsibility and firm performance from a social media perspective

Purpose: Corporate responsibility perceptions from stakeholders are becoming more difficult to manage. This is in part because of large amount of social media being projected to stakeholders on a daily basis. In light of this, the purpose of this paper is to examine the relationship between corporate responsibility framing from the social media perspective firm’s performance as defined by abnormal-return (defined as the difference between a single stock or portfolios return and the expected return) and idiosyncratic-risk (defined as the risk of a particular investment because of firm-specific characteristics). Design/methodology/approach: Hypotheses are developed through agenda-setting theory and stakeholder and shareholder viewpoints. The research model is tested using sentiment analysis from a collection of social media from several industries. Findings: The results provide support that three corporate responsibility social media categories (economic, social and environmental-framing) will have different impacts (delayed, immediate) on abnormal-return and idiosyncratic-risk. This study finds differences between immediate (one-day lag) and delayed (three-day lag) associations on abnormal-return and idiosyncratic-risk. Originality/value: This study also suggests differences between the amount and sentiment of corporate responsibility social media framing on abnormal-return and idiosyncratic-risk. Finally, results identify interaction effects between different corporate responsibility social media categories.