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Does Corporate Social Responsibility Affect Firms' Performance?


  • Laura Poddi
  • Sergio Vergalli


In the last two decades in the OECD countries there have been a raising development of firms certified as Social Responsible (CSR is the acronym of Corporate Social Responsibility). This kind of certification is assigned by private companies that guarantee that the behaviour of a certain firms environmentally and sociologically correct. Some papers (among other Preston and O'Bannon, 1997; Waddock and Graves, 1997; McWilliams and Sieger, 2001; Ullman, 1985) tried to verify if there exists a link between Social Responsibility certification and firms' performance. Their results are ambiguous and do not show a common path. This ambiguity depends mainly on the static nature of their analyses and on problem if performance is affected more by certification costs or by increasing sales due to a reputation effect. Our work would like to verify, after a review of literature, by using panel data, if some performance indicators can be affected by the firms' social responsible behaviour and their certifications. The novelty of our analysis comes from its dynamic aspect and from the building of 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 be objective and to have a representative sample. The main results seem to support the idea that the CSR firms are the more virtuous, having better performances in the long run: they bear some initial costs but obtain higher sales and profits due to several causes: reputation effect, a reduction of long rin costs, increasing social responsible demand.

Suggested Citation

  • Laura Poddi & Sergio Vergalli, 2008. "Does Corporate Social Responsibility Affect Firms' Performance?," Working Papers 0809, University of Brescia, Department of Economics.
  • Handle: RePEc:ubs:wpaper:0809

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    References listed on IDEAS

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    1. Martin Meier & Enrico Minelli & Herakles Polemarchakis, 2014. "Competitive markets with private information on both sides," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(2), pages 257-280, February.
    2. Monica Billio & Roberto Casarin, 2010. "Bayesian Estimation of Stochastic-Transition Markov-Switching Models for Business Cycle Analysis," Working Papers 1002, University of Brescia, Department of Economics.
    3. Rosella Levaggi & Francesco Menoncin, 2009. "Decentralized provision of merit and impure public goods," Working Papers 0909, University of Brescia, Department of Economics.
    4. Bisin, A. & Geanakoplos, J.D. & Gottardi, P. & Minelli, E. & Polemarchakis, H., 2011. "Markets and contracts," Journal of Mathematical Economics, Elsevier, vol. 47(3), pages 279-288.
    5. Francesco Menoncin & Paolo Panteghini, 2009. "Retrospective Capital Gains Taxation in the Real World," CESifo Working Paper Series 2674, CESifo Group Munich.
    6. Del Boca, Alessandra & Fratianni, Michele & Spinelli, Franco & Trecroci, Carmine, 2010. "The Phillips curve and the Italian lira, 1861-1998," The North American Journal of Economics and Finance, Elsevier, vol. 21(2), pages 182-197, August.
    7. Alessandro Fedele & Paolo M. Panteghini & Sergio Vergalli, 2011. "Optimal Investment and Financial Strategies under Tax‐Rate Uncertainty," German Economic Review, Verein für Socialpolitik, vol. 12(4), pages 438-468, November.
    8. Alessandro Fedele & Raffaele Miniaci, 2010. "Do Social Enterprises Finance Their Investments Differently from For-profit Firms? The Case of Social Residential Services in Italy," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 1(2), pages 174-189, October.
    9. Alessandro Fedele & Francesco Liucci & Andrea Mantovani, 2009. "Credit availability in the crisis: the European investment bank group," Working Papers 0913, University of Brescia, Department of Economics.

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