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Does Corporate Social Responsibility Affect the Performance of Firms?

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  • Nicola Comincioli

    (University of Brescia)

  • Laura Poddi

    (University of Ferrara)

  • Sergio Vergalli

    (University of Brescia and FEEM)

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    Abstract

    Over the last two decades in OECD countries an increasing number of firms are obtaining certification as Socially Responsible (CSR is the acronym for Corporate Social Responsibility). Several studies (including Preston and O’Bannon, 1997; Waddock and Graves, 1997; McWilliams and Sieger, 2001; Ullman, 1985) have sought to test whether there is a relation between Social Responsibility certification and firm performance. Our work builds a CSR index that intersects two of the three main international indices (Domini 400 Social Index, Dow Jones Sustainability World Index, FTSE4Good Index), in order to overcome some problems related to the multiplicity of CSR definitions and certifications. By using this database in a panel framework, our work shows that some performance indicators are affected by a firm’s social responsible behaviour and certifications. The main results seem to support the idea that CSR firms, which are more virtuous, have better long-run performance: even if they have initial costs due to the certification, they achieve higher sales volumes and profits, thanks to the reputation effect, a reduction in long-run costs and increased social responsible demand.

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    Bibliographic Info

    Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2012.53.

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    Date of creation: Jul 2012
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    Handle: RePEc:fem:femwpa:2012.53

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    Keywords: Corporate Social Responsibility; Growth;

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    References

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    1. Dierkes, Meinolf & Preston, Lee E., 1977. "Corporate social accounting reporting for the physical environment: A critical review and implementation proposal," Accounting, Organizations and Society, Elsevier, vol. 2(1), pages 3-22, January.
    2. S. Brammer & Geoffrey Williams & John Zinkin, 2007. "Religion and Attitudes to Corporate Social Responsibility in a Large Cross-Country Sample," Journal of Business Ethics, Springer, Springer, vol. 71(3), pages 229-243, March.
    3. Cowen, Scott S. & Ferreri, Linda B. & Parker, Lee D., 1987. "The impact of corporate characteristics on social responsibility disclosure: A typology and frequency-based analysis," Accounting, Organizations and Society, Elsevier, vol. 12(2), pages 111-122, March.
    4. Stephen J. Brammer & Stephen Pavelin, 2006. "Corporate Reputation and Social Performance: The Importance of Fit," Journal of Management Studies, Wiley Blackwell, Wiley Blackwell, vol. 43(3), pages 435-455, 05.
    5. Mike Adams, 1998. "An Analysis of Corporate Donations: United Kingdom Evidence," Journal of Management Studies, Wiley Blackwell, Wiley Blackwell, vol. 35(5), pages 641-654, 09.
    6. Navarro, Peter, 1988. "Why Do Corporations Give to Charity?," The Journal of Business, University of Chicago Press, vol. 61(1), pages 65-93, January.
    7. Sergio Vergalli & Laura Poddi, 2009. "Does Corporate Social Responsibility Affect the Performance of Firms?," Working Papers, Fondazione Eni Enrico Mattei 2009.52, Fondazione Eni Enrico Mattei.
    8. Parket, I. Robert & Eilbirt, Henry, 1975. "The practice of business social responsibility: the underlying factors," Business Horizons, Elsevier, Elsevier, vol. 18(4), pages 5-10, August.
    9. Roberts, Robin W., 1992. "Determinants of corporate social responsibility disclosure: An application of stakeholder theory," Accounting, Organizations and Society, Elsevier, vol. 17(6), pages 595-612, August.
    10. Louis Amato & Christie Amato, 2007. "The Effects of Firm Size and Industry on Corporate Giving," Journal of Business Ethics, Springer, Springer, vol. 72(3), pages 229-241, May.
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    Cited by:
    1. Paolo Cominetti & Laura Poddi & Sergio Vergalli, 2012. "The Push Factors for Corporate Social Responsibility: A Probit Analysis," Working Papers, Fondazione Eni Enrico Mattei 2012.58, Fondazione Eni Enrico Mattei.

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