Corporate Social Responsibility (CSR) Seminar: The dog that didn’t bark – long-term strategies in times of recession

In the third Corporate Social Responsibility (CSR) Research Group seminar for 2017/18, Dr Ioannis Ioannou, Associate Professor at the London Business School, will provide a brief overview of his work in CSR and sustainability, particularly with regards to the link to financial performance, as a background, and in order to position the contribution of the paper The Dog That Didn’t Bark – Long-Term Strategies in Times of Recession which he will present.

This paper investigates how US companies adjusted their investments in key strategic resources (i.e. human capital, tangible, and intangible resources) during the Great Recession of 2007-2009. To obtain exogenous variation in the severity of the crisis, this research exploits the differential intensity of the house price collapse across US regions, instrumenting house price shocks with Saiz’ (2010) topological measure of housing supply elasticity. The findings indicate that companies significantly laid off employees and curtailed capital expenditures. Importantly, they did not reduce investments in R&D and corporate social responsibility (CSR). The authors further document that firms that sustained their R&D and CSR performed better once the economy recovered. Overall, these findings confirm the authors’ theoretical arguments suggesting that intangible strategic resources such as innovation capability and stakeholder relations are instrumental in sustaining a competitive advantage during (and beyond) times of crisis.

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