Corporate social responsibility is just a twist in a Möbius Strip: An empirical test on Italian cooperatives

In order to devise a new cost-benefit function, in this work we apply in a Corporate Social Responsibility (CSR) context the electro-magnetism geometrical model of the Möbius Strip, which analyzes how the moves of electrons produce energy. Similarly to the case of electrons tunneling in the strip, we highlight three positive crossed effects on firm performance originating from: i) cooperation within the same group of stakeholders; ii) cooperation between different groups of stakeholders; iii) stakeholders' loyalty towards the company. By applying this new cost-benefit function to a firms' decision making processes we evidence that investing in CSR activities is always convenient depending on the number of stakeholder groups, on stakeholders' sensitivity to CSR investments and on the decay rate to alienation. We test these findings through Structural Equation Modelling by exploiting a unique dataset including data on 4135 workers in a matched sample of 320 Italian social enterprises. Results show that CSR is, in all specifications of the model, the strongest determinant of firm performance in terms of improvement in service quality and worker achieved professional and personal growth. Direct effects of CSR on performance are added to indirect effects mediated by cooperation and reduced worker alienation in terms of higher job satisfaction.