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Corporate social responsibility, financial instability and corporate financial performance: Linear, non-linear and spillover effects – The case of the CAC 40 companies

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  • Jahmane, Abderrahmane
  • Gaies, Brahim

Abstract

This article examines the influence of corporate social responsibility (CSR) on the financial performance (CFP) for CAC 40 companies from 2002 to 2017, considering the effect of financial instability at the macro level. We based our approach on a dynamic modeling of the CFP-CSR relationship, as well as on the generalized method of moments (GMM) to overcome the problem of endogeneity. Our results show that CSR positively affects the CFP in two ways: directly, through an overall positive non-linear effect, and indirectly by mitigating the negative effect of banking crises on the CFP, which is a positive spillover effect.

Suggested Citation

  • Jahmane, Abderrahmane & Gaies, Brahim, 2020. "Corporate social responsibility, financial instability and corporate financial performance: Linear, non-linear and spillover effects – The case of the CAC 40 companies," Finance Research Letters, Elsevier, vol. 34(C).
    • Handle: RePEc:eee:finlet:v:34:y:2020:i:c:s1544612319314576
    DOI: 10.1016/j.frl.2020.101483
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    More about this item

    Keywords

    Financial instability; Corporate social responsibility; Corporate financial performance; Endogeneity; Generalized method of moments (GMM); JEL: G30; G34; F41; C02;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

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