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Does Corporate Social Responsibility Affect the Performance of Firms?

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  • Comincioli, Nicola
  • Poddi, Laura
  • Vergalli, Sergio

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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  • Comincioli, Nicola & Poddi, Laura & Vergalli, Sergio, 2012. "Does Corporate Social Responsibility Affect the Performance of Firms?," Economy and Society 130899, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemso:130899
    DOI: 10.22004/ag.econ.130899
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    1. Roger C.Y. Chen & Shih‐Wei Hung, 2021. "Exploring the impact of corporate social responsibility on real earning management and discretionary accruals," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(1), pages 333-351, January.
    2. Paolo Cominetti & Laura Poddi & Sergio Vergalli, 2013. "The Push Factors for Corporate Social Responsibility: A Probit Analysis," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 3(2), pages 1-2, April.
    3. Blasi, Silvia & Caporin, Massimiliano & Fontini, Fulvio, 2018. "A Multidimensional Analysis of the Relationship Between Corporate Social Responsibility and Firms' Economic Performance," Ecological Economics, Elsevier, vol. 147(C), pages 218-229.
    4. Cristian Carini & Nicola Comincioli & Laura Poddi & Sergio Vergalli, 2017. "Measure the Performance with the Market Value Added: Evidence from CSR Companies," Sustainability, MDPI, vol. 9(12), pages 1-19, November.
    5. Arian, Adam G. & Sands, John, 2024. "Do corporate carbon emissions affect risk and capital costs?," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1363-1377.
    6. Roger C. Y. Chen & Chen-Hsun Lee, 2017. "The influence of CSR on firm value: an application of panel smooth transition regression on Taiwan," Applied Economics, Taylor & Francis Journals, vol. 49(34), pages 3422-3434, July.
    7. Khan, Mehmood & Ajmal, Mian M. & Gunasekaran, Angappa & AlMarzouqi, Abdulla H. & AlNuaimi, Bader Khamis, 2021. "Measures of greenness: An empirical study in service supply chains in the UAE," International Journal of Production Economics, Elsevier, vol. 241(C).
    8. Diana Tuomasjukka & Staffan Berg & Marcus Lindner, 2013. "Managing Sustainability of Fennoscandian Forests and Their Use by Law and/or Agreement: For Whom and Which Purpose?," Sustainability, MDPI, vol. 6(1), pages 1-32, December.
    9. María del Mar Miras‐Rodríguez & Amalia Carrasco‐Gallego & Bernabé Escobar‐Pérez, 2015. "Are Socially Responsible Behaviors Paid Off Equally? A Cross‐cultural Analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(4), pages 237-256, July.
    10. Reif, Christiane & Rexhäuser, Sascha, 2015. "Good enough! Are socially responsible companies the more successful environmental innovators?," ZEW Discussion Papers 15-018, ZEW - Leibniz Centre for European Economic Research.
    11. Sergio Vergalli & Laura Poddi, 2009. "Does Corporate Social Responsibility Affect the Performance of Firms?," Working Papers 2009.52, Fondazione Eni Enrico Mattei.
    12. Hee‐Jin Park & Mi‐Hye Ha, 2020. "Corporate social responsibility and earnings transparency: Evidence from Korea," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1498-1508, May.
    13. Roger C.Y. Chen & Shih‐Wei Hung & Chen‐Hsun Lee, 2018. "Corporate Social Responsibility and Firm Idiosyncratic Risk in Different Market States," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(4), pages 642-658, July.
    14. Roger C.Y. Chen & Chen‐Hsun Lee & Shih‐Wei Hung, 2020. "The relationship between ex‐ante cost of equity capital and corporate social responsibility in introductory and maturity period," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 1089-1107, March.
    15. Giovanna Gavana & Pietro Gottardo & Anna Maria Moisello, 2018. "Do Customers Value CSR Disclosure? Evidence from Italian Family and Non-Family Firms," Sustainability, MDPI, vol. 10(5), pages 1-17, May.
    16. Tanveer Bagh & Muhammad Asif Khan & Tahir Azad & Shamila Saddique & Muhammad Atif Khan, 2017. "The Corporate Social Responsibility and Firms' Financial Performance: Evidence from Financial Sector of Pakistan," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 301-308.

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    More about this item

    Keywords

    Public Economics;

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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