Corporate Social Responsibility and Firm Financial Performance: Evidence from America’s Best Corporate Citizens

This paper examines the relation between corporate social responsibility (CSR) and firm financial performance—a topic that continues to generate debate among academics and practitioners. We focus on firms included in the 100 Best Corporate Citizens (BCC) rankings from 2009 to 2022, a list that highlights companies recognized for CSR transparency and performance. Using panel data regression analyses and matched sample comparison, we examine whether BCC firms outperform their peers. Our findings show that, relative to matched firms not included in the rankings, BCC firms demonstrate significantly stronger future operating performance. Among BCC firms, CSR rankings are positively associated with future operating performance, although this positive relation has diminished in more recent years. Furthermore, we find no significant association between operating performance and most individual CSR component rankings except for employee relations. Finally, our evidence indicates that more socially responsible firms engage in less tax avoidance and pay higher audit fees, suggesting that CSR-oriented firms exhibit stronger ethical considerations across a broad range of corporate activities. This study contributes to the CSR literature by providing updated empirical evidence and practical insights for stakeholders evaluating corporate behavior and outcomes through the BCC rankings.