IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v9y2017i7p1210-d104193.html
   My bibliography  Save this article

Testing the Correlations between Corporate Giving, Performance and Company Value

Author

Listed:
  • Camelia-Daniela Hategan

    () (Department of Accounting and Audit, Faculty of Economics and Business Administration, West University of Timisoara, 16 Pestalozzi Street, 300115 Timisoara, Romania)

  • Ruxandra-Ioana Curea-Pitorac

    () (Department of Economics and Modeling, Faculty of Economics and Business Administration, West University of Timisoara, 16 Pestalozzi Street, 300115 Timisoara, Romania)

Abstract

The paper seeks to identify the relationship between the charitable contributions, performance, and market value of Romanian listed companies. To achieve the objective, a panel data analysis was conducted on a group of companies listed at Bucharest Stock Exchange in the period 2011 to 2016, which registered profit for the entire period. The empirical analysis points out, using a logistic regression, which financial and non-financial indicators contribute to the decisions of the companies to make the charitable contributions. It also tests the impact of those indicators and corporate giving activities like Corporate Social Responsibility (CSR) activities on company value, represented by Tobin’s Q Ratio and on company performance, expressed by Return on Equity (ROE). The results show that there is a positive correlation between the charitable contributions, performance, and market value of the Romanian listed companies.

Suggested Citation

  • Camelia-Daniela Hategan & Ruxandra-Ioana Curea-Pitorac, 2017. "Testing the Correlations between Corporate Giving, Performance and Company Value," Sustainability, MDPI, Open Access Journal, vol. 9(7), pages 1-20, July.
  • Handle: RePEc:gam:jsusta:v:9:y:2017:i:7:p:1210-:d:104193
    as

    Download full text from publisher

    File URL: http://www.mdpi.com/2071-1050/9/7/1210/pdf
    Download Restriction: no

    File URL: http://www.mdpi.com/2071-1050/9/7/1210/
    Download Restriction: no

    References listed on IDEAS

    as
    1. Otgontsetseg Erhemjamts & Qian Li & Anand Venkateswaran, 2013. "Corporate Social Responsibility and Its Impact on Firms’ Investment Policy, Organizational Structure, and Performance," Journal of Business Ethics, Springer, vol. 118(2), pages 395-412, December.
    2. Navarro, Peter, 1988. "Why Do Corporations Give to Charity?," The Journal of Business, University of Chicago Press, vol. 61(1), pages 65-93, January.
    3. Elena Dobre & Georgiana Oana Stanila & Laura Brad, 2015. "The Influence of Environmental and Social Performance on Financial Performance: Evidence from Romania’s Listed Entities," Sustainability, MDPI, Open Access Journal, vol. 7(3), pages 1-41, March.
    4. Pintea Mirela-Oana, 2012. "Performance Evaluation: Literature Review And Time Evolution," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 753-758, July.
    5. Carroll, Archie B., 1991. "The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders," Business Horizons, Elsevier, vol. 34(4), pages 39-48.
    6. Abagail McWilliams & Donald S. Siegel & Patrick M. Wright, 2006. "Corporate Social Responsibility: Strategic Implications," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 1-18, January.
    7. Fama, Eugene F. & French, Kenneth R., 1997. "Industry costs of equity," Journal of Financial Economics, Elsevier, vol. 43(2), pages 153-193, February.
    8. José Luis Sánchez & Ladislao Sotorrío, 2007. "The Creation of Value Through Corporate Reputation," Journal of Business Ethics, Springer, vol. 76(3), pages 335-346, December.
    9. Ron Bird & Anthony D. Hall & Francesco Momentè & Francesco Reggiani, 2007. "What Corporate Social Responsibility Activities are Valued by the Market?," Journal of Business Ethics, Springer, vol. 76(2), pages 189-206, December.
    10. Raluca Gina Guse & Alina Almasan & Cristina Circa & Madalina Dumitru, 2016. "The Role of the Stakeholders in the Institutionalization of the CSR Reporting In Romania," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 15(2), pages 304-340, June.
    11. Edward Nelling & Elizabeth Webb, 2009. "Corporate social responsibility and financial performance: the “virtuous circle” revisited," Review of Quantitative Finance and Accounting, Springer, vol. 32(2), pages 197-209, February.
    12. Kee H. Chung & Stephen W. Pruitt, 1994. "A Simple Approximation of Tobin's q," Financial Management, Financial Management Association, vol. 23(3), Fall.
    13. Chin-Shien Lin & Ruei-Yuan Chang & Van Thac Dang, 2015. "An Integrated Model to Explain How Corporate Social Responsibility Affects Corporate Financial Performance," Sustainability, MDPI, Open Access Journal, vol. 7(7), pages 1-20, June.
    14. Heli Wang & Jaepil Choi & Jiatao Li, 2008. "Too Little or Too Much? Untangling the Relationship Between Corporate Philanthropy and Firm Financial Performance," Organization Science, INFORMS, vol. 19(1), pages 143-159, February.
    15. Chung-Hua Shen & Yuan Chang, 2009. "Ambition Versus Conscience, Does Corporate Social Responsibility Pay off? The Application of Matching Methods," Journal of Business Ethics, Springer, vol. 88(1), pages 133-153, April.
    16. Philipp Schreck, 2011. "Reviewing the Business Case for Corporate Social Responsibility: New Evidence and Analysis," Journal of Business Ethics, Springer, vol. 103(2), pages 167-188, October.
    17. Roberto Garcia-Castro & Miguel Ariño & Miguel Canela, 2010. "Does Social Performance Really Lead to Financial Performance? Accounting for Endogeneity," Journal of Business Ethics, Springer, vol. 92(1), pages 107-126, March.
    18. Ronald Hill & Thomas Ainscough & Todd Shank & Daryl Manullang, 2007. "Corporate Social Responsibility and Socially Responsible Investing: A Global Perspective," Journal of Business Ethics, Springer, vol. 70(2), pages 165-174, January.
    19. Bilal Fayiz Omar & Nidal Omar Zallom, 2016. "Corporate social responsibility and market value: evidence from Jordan," Journal of Financial Reporting and Accounting, Emerald Group Publishing, vol. 14(1), pages 2-29, July.
    20. repec:gam:jsusta:v:9:y:2017:i:5:p:723-:d:97266 is not listed on IDEAS
    21. Elisha Vlaholias & Kirrilly Thompson & Danielle Every & Drew Dawson, 2015. "Charity Starts … at Work? Conceptual Foundations for Research with Businesses that Donate to Food Redistribution Organisations," Sustainability, MDPI, Open Access Journal, vol. 7(6), pages 1-25, June.
    22. Maretno Harjoto & Hoje Jo, 2011. "Corporate Governance and CSR Nexus," Journal of Business Ethics, Springer, vol. 100(1), pages 45-67, April.
    23. Glen Dowell & Stuart Hart & Bernard Yeung, 2000. "Do Corporate Global Environmental Standards Create or Destroy Market Value?," Management Science, INFORMS, vol. 46(8), pages 1059-1074, August.
    24. repec:gam:jsusta:v:9:y:2017:i:5:p:717-:d:97208 is not listed on IDEAS
    25. Tamara Eugenia Baleanu & Liviu Chelcea & Alin Stancu, 2011. "The Social Responsibility of the Top 100 Romanian Companies. An Analysis of Corporate Websites," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 13(29), pages 235-248, February.
    26. Ronald W. Masulis & Syed Walid Reza, 2015. "Agency Problems of Corporate Philanthropy," Review of Financial Studies, Society for Financial Studies, vol. 28(2), pages 592-636.
    27. Rim Makni & Claude Francoeur & François Bellavance, 2009. "Causality Between Corporate Social Performance and Financial Performance: Evidence from Canadian Firms," Journal of Business Ethics, Springer, vol. 89(3), pages 409-422, October.
    28. Theofanis Karagiorgos, 2010. "Corporate Social Responsibility and Financial Performance: An Empirical Analysis on Greek Companies," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 85-108.
    29. Bhagat, Sanjai & Bolton, Brian, 2008. "Corporate governance and firm performance," Journal of Corporate Finance, Elsevier, vol. 14(3), pages 257-273, June.
    30. Adaeze Okoye, 2009. "Theorising Corporate Social Responsibility as an Essentially Contested Concept: Is a Definition Necessary?," Journal of Business Ethics, Springer, vol. 89(4), pages 613-627, November.
    31. Mike Adams, 1998. "An Analysis of Corporate Donations: United Kingdom Evidence," Journal of Management Studies, Wiley Blackwell, vol. 35(5), pages 641-654, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:gam:jsusta:v:10:y:2018:i:3:p:726-:d:135059 is not listed on IDEAS
    2. repec:gam:jsusta:v:10:y:2018:i:4:p:1041-:d:139072 is not listed on IDEAS
    3. repec:gam:jsusta:v:10:y:2018:i:7:p:2353-:d:156579 is not listed on IDEAS
    4. repec:taf:oabmxx:v:4:y:2017:i:1:p:1398124 is not listed on IDEAS
    5. repec:gam:jsusta:v:10:y:2018:i:7:p:2497-:d:158389 is not listed on IDEAS
    6. repec:ers:ijebaa:v:v:y:2017:i:4:p:35-55 is not listed on IDEAS

    More about this item

    Keywords

    corporate social responsibility; corporate giving; philanthropy; charitable contributions; company value; performance; Tobin’s Q Ratio;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:9:y:2017:i:7:p:1210-:d:104193. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (XML Conversion Team). General contact details of provider: http://www.mdpi.com/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.