Journal of Finance Vol. 81 No. 1 2026
An Economic View of Corporate Social Impact
Abstract
Growing discussions of impact investing and stakeholder capitalism have increased interest in measuring companies' social impact. We conceptualize corporate social impact as the welfare loss that would be caused by a firm's exit. To illustrate, we quantify the social impacts of 74 firms in 12 industries using a new survey measuring consumer and worker substitution patterns combined with models of product and labor markets. We find that consumer surplus is the primary component of social impact, suggesting that consumer impacts deserve more attention from impact investors. Existing environmental, social, and governance (ESG) and social impact ratings are essentially unrelated to our economically grounded measures.
- DOI
- 10.1111/jofi.70004
- Volume
- 81
- Issue
- 1
- Pages
- 285-328
- Language
- en
- Sources
- openalex crossref