We show that firm misvaluation positively affects firm's corporate social responsibility (CSR) ratings. And the positive effect is only significant when firms are heavily overvalued. The result holds when we include net equity issue and net debt issue in the regression, and when we exclude...

We review the burgeoning sustainable finance literature, emphasizing the value implications of ESG (environmental, social, and governance) and CSR (corporate social responsibility) practices. We use a discounted cash flow valuation framework to identify value drivers through which such practices...