Michelle Lai

Date of Award

Spring 2023

Degree Name

Bachelor of Science (BS)

Advisor(s)

Jie Ren

Abstract

This research paper analyzes the effect of positive and negative CSR news on healthcare firms’ financial performance, and particularly during a global event such as the COVID-19 pandemic. This paper seeks to further the research on the impact of CSR news on different ESG ranked healthcare firms within the U.S., providing a more narrowed focus on an industry that has significant Social CSR importance and relevance. The main research questions of this paper are: How do healthcare companies’ ESG scores affect the volatility of their stock price during the pandemic? Is there a causal relationship associated with positive and negative external ESG events on healthcare companies’ financial performance (volatility and cumulative abnormal returns)? This paper begins with an introduction to the importance of ESG and CSR in recent years, followed by a literature review of how stock markets have reacted to positive and negative ESG news. It also hones in on the healthcare industry as an area of interest due to its social capital effects. The empirical study will include testing correlation between stock price volatility and MSCI ESG Scores as well as linear regression and difference in difference (DID) analysis to see the impact of positive and negative CSR events on ESG-ranked healthcare companies.

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