The curvilinear relationship between corporate social performance and financial performance

2019 ◽  
Vol 10 (1) ◽  
pp. 87-100 ◽  
Author(s):  
Shafat Maqbool ◽  
Abu Bakr
Keyword(s):  
Financial Performance ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Linear Perspective ◽  
Curvilinear Relationship ◽  
Managerial Implication ◽  
Content Type ◽  
Long Run ◽  
Corporate Social ◽  
The Relationship

Purpose The relationship between corporate social responsibility (CSR) and financial performance (FP) has bourgeoned widespread debate among researchers. In recent years, the debate has explored more dynamic links, one of which is the curvilinear relationship, between CSR and FP. This paper aims to empirically test the curvilinear relationship between CSR and FP in the context of Indian companies. Design/methodology/approach This paper empirically tests the curvilinear relationship between CSR and FP in the context of Indian companies. The study used a panel data of 43 listed companies over a period of ten years from 2008 to 2017. A correlation and panel regression were carried out to examine the possible link. Findings The findings demonstrate that a curvilinear relationship exists between CSR and FP, suggesting that two long competing viewpoints may be complementary. Research limitations/implications The study mainly focuses on top companies, so the generalizations of results to other small companies are unwanted. Practical implications An immediate managerial implication of the findings suggests that to serve the interests of the shareholders, a long-run planning and considerable resources should be dedicated at this direction, given that CSR expenditure does not pay off immediately. Originality/value In the Indian context, very few studies have analyzed the linkages between CSR and FP. Using an improved and distinctive approach, the study empirically tests the relationship between CSR and FP from non-linear perspective.

Long-run dynamics between CFP and CSP in the GCC banking sector: estimation of non-stationary heterogeneous panels allowing for cross-sectional dependence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ismail Ben Douissa ◽  
Tawfik Azrak
Keyword(s):  
Financial Performance ◽  
Granger Causality ◽  
Banking Sector ◽  
Social Performance ◽  
Content Type ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Corporate Social ◽  
The Relationship ◽  
Long Run Equilibrium

Purpose Causality between corporate financial performance (CFP) and corporate social performance (CSP) has been extensively debated in previous research works; however, little research has been done to investigate the long-run dynamics between these two constructs. The purpose of this paper is to enrich the CFP–CSP literature by estimating the long-run equilibrium relationship between financial performance and social performance in the banking sector in the Gulf Cooperation Council countries over the period 2009–2019. Design/methodology/approach The paper adopts an approach that is primarily used in financial economics: first, the authors perform panel long-run Granger causality following Canning and Pedroni’s procedure to indicate the direction of the causal relationship. Second, the authors estimate an error correction model using Chudik and Pesaran’s (2015) dynamic common correlated effects mean group estimator to determine the sign of the relationship. Findings The present research findings prove the existence of a long-run equilibrium relationship between CFP and CSP, while indicating at the same time that panel Granger causality runs positively from CSP to CFP, which means that changes in CSP produce lasting changes in CFP. Practical implications The findings of the paper would guide strategists to build fit for purpose corporate social responsibility (CSR) strategies in their firms and establish a continuous investment in CSR activities in the long run rather than harshly investing in CSR activities in the short run. Originality/value To the best of the authors’ knowledge, this paper is the first one to address heterogeneity in long-run Granger causality tests to estimate the relationship between CSP and CFP.

The illusion of CSR: drawing the line between core and supplementary CSR

2016 ◽  
Vol 7 (1) ◽  
pp. 125-151 ◽  
Author(s):  
Pablo Gomez-Carrasco ◽  
Encarna Guillamon-Saorin ◽  
Beatriz Garcia Osma
Keyword(s):  
Financial Performance ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Theoretical Framework ◽  
Content Type ◽  
Savings Banks ◽  
Strategic Csr ◽  
Key Aspects ◽  
Corporate Social ◽  
The Relationship

Purpose – The purpose of this paper is to contribute to the development of the theoretical framework for corporate social responsibility (CSR) and to provide a number of conceptual considerations which can be considered in the design of measures for corporate social performance (CSP). Design/methodology/approach – This study develops a theoretical framework of CSR and provides conceptual considerations to improve the measurement of CSP. The example of Spanish savings banks is used to illustrate the complexity of the concept of CSR, which includes different dimensions and relationships. Findings – CSP evaluation can be affected by the illusion of CSR, which may result in invalid conclusions on the relationship with financial performance. This risk mainly affects those studies whose CSP measure is based on charity or philanthropic activities, as most of the time they are disconnected from core business. These activities enjoy great visibility and, in some cases, such as Spanish savings banks, they become a thick veil that can be used to hide serious deficiencies in other key aspects of CSP. Research limitations/implications – This study has implications for the literature on the conceptual and theoretical framework of CSR and the research on the link between CSP and financial performance. This paper highlights the importance of seeking comprehensive measures that cannot be misleading because of the relationships between the components of CSR. Originality/value – The paper provides a novel conceptual framework for CSR, which connects the conceptual debate around “Strategic CSR” with the theoretical framework designed by Carroll’s (1991) Pyramid of CSR and emphasizes the importance of a meticulous examination of the CSP construct before studying its relationship with financial performance.

Labour reputation and financial performance: is there a causal relationship?

2018 ◽  
Vol 40 (1) ◽  
pp. 43-57 ◽  
Author(s):  
María Dolores Odriozola ◽  
Antonio Martin ◽  
Ladislao Luna
Keyword(s):  
Financial Performance ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Causality Test ◽  
Content Type ◽  
Generalised Method Of Moments ◽  
Corporate Social ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to analyse if there is a circular relationship of causality between the labour dimension of corporate social performance (CSP) and corporate financial performance (CFP). Design/methodology/approach The sample is formed by the best companies to work for in Spain according to the labour reputation (LR) ranking developed by MERCO from 2006 to 2013. This study overcomes the limitations of previous studies using the panel data methodology (System generalised method of moments) and the Granger causality test. Findings The results suggest that the labour dimension of CSP cause CFP, but there is not causality in the opposite direction. Originality/value Studies about the relationship between dimensions of CSP and CFP demonstrated that there are divergences in the results depending on the dimension analysed. Despite managers and employees are interested in the impact of labour dimension of CSP on CFP, there are few studies about it and they have important limitations.

Revisiting the financial performance – corporate social performance link

2018 ◽  
Vol 30 (7) ◽  
pp. 2586-2602 ◽  
Author(s):  
Serin Choi ◽  
Seoki Lee
Keyword(s):  
Financial Performance ◽  
Agency Theory ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Content Type ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship ◽  
Moderating Role

Purpose The existing literature has focused heavily on investigating the effect of corporate social performance (CSP) on financial performance (FP) but has not paid sufficient attention to an inverse causation of the relationship. Moreover, while some of the literature argues that FP positively affects CSP, based on the slack resources theory, others have found negative effects of FP on CSP, supporting the managerial opportunism perspective. Thus, this paper aims to address the impact of FP on CSP. Further, this study examines the moderating role of franchising to better understand the relationship. Design/methodology/approach This study uses and expands the models derived from the CSP literature to confirm the effects of FP on CSP with the moderating role of franchising within the restaurant industry. Using two-way fixed effects models, it effectively addresses important problems embedded in the panel data. Findings The findings show a positive effect of FP on CSP, which is inconsistent with Park and Lee’s (2009) findings and supports the slack resources theory. Further, the interesting results show that the impact of FP on CSP diminishes as a firm franchises more, supporting the double-sided moral hazard framework of the agency theory. Originality/value This paper fills the lacuna in both the existing literature on the relationship between CSP and FP and the franchising. This study contributes to enhancing restaurant practitioners’ understanding of the double-sided moral hazard of agency theory unique to franchising context.

The relationship between poor CSR performance and hard, negative CSR information disclosures

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maher Jeriji ◽  
Waël Louhichi
Keyword(s):  
Information Disclosure ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Panel Data Analysis ◽  
Content Type ◽  
Csr Reporting ◽  
Opportunistic Behaviour ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between hard, negative corporate social responsibility (CSR) information disclosure and corporate social performance. Design/methodology/approach This study uses a generalised least squares panel data analysis based on a sample of firms ranked in the Fortune Global 500 for the period 2013–2016. Robustness check tests were conducted to limit endogeneity concerns. Findings The results show that in line with strategic legitimacy theory, agency theory and organisational stigma theory, poor sustainability performers disclose a low quality of hard, negative CSR information. Practical implications This paper provides guidance for stakeholders to identify good and poor CSR performers by better understanding whether corporate CSR reports are more likely to be symbolic or substantive when considering the amount of hard, negative content in their CSR stand-alone reports. Social implications The research highlights the opportunistic behaviour of CSR reporting, which is used more as a legitimation device than as an accountability mechanism. Thi Originality/value Although numerous studies have investigated the association between the level of corporate social disclosure (CSD) and corporate social performance, no research has focussed on hard, negative CSD. Also, an index that captures the disclosure quality rather than the quantity of negative CSR information was constructed.

Corporate social and financial performance in different industry contexts: the chicken or the egg?

2016 ◽  
Vol 12 (4) ◽  
pp. 672-686 ◽  
Author(s):  
Anni Tuppura ◽  
Heli Arminen ◽  
Satu Pätäri ◽  
Ari Jantunen
Keyword(s):  
Financial Performance ◽  
Granger Causality ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Causality Test ◽  
Content Type ◽  
Forest Industries ◽  
The Usa ◽  
Causality Relationship ◽  
Corporate Social

Purpose The purpose of the paper is to examine empirically Granger causality relationships between corporate social performance (CSP) and corporate financial performance (CFP) in four different industries. Design/methodology/approach The paper uses the Granger causality test to analyse the causality relationships between CSP and CFP in clothing, energy, food and forest industries in the USA. The panel data used combined CSP and CFP measures over the years 1991-2009. CSP strengths and concerns are handled as distinct constructs. Findings There is some evidence of bidirectional causality between CSP and CFP in the clothing, energy and forest industries; but in the food industry, CSP appears not to Granger-cause CFP. The results encourage accounting for the industry in empirical analyses, as well as the use of more than one measure for CFP in the analyses. Originality/value The direction of causality between CSP and CFP has been specifically addressed in only a few studies. Because the causality relationship may, in addition, be concealed when multi-industry data are used, this paper contributes to the literature by examining the Granger causality between CSP and CFP in four different industry contexts using two different measures of CFP.

scholarly journals Desempenho social e financeiro de pequenas e médias empresas: modelo conceitual de causa e efeito

2016 ◽  
Vol 15 (2) ◽  
pp. 60-70
Author(s):  
Jose Elenilson Cruz ◽  
Rafael Barreiros Porto
Keyword(s):  
Financial Performance ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Empirical Studies ◽  
The Social ◽  
Research Propositions ◽  
Object Of Study ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

Corporate social performance can be understood as a way to measure the efficiency of interactions between companies and their main stakeholders. This evaluation has led to some steps forward in research and management implications. One of its main issues, which is the study of the relationship between social and financial performance, focuses on traditional joint-stock companies. This fact reveals a gap concerning the object of study in the literature of the area. The importance of investigating small and medium companies (SMCs) lies in their social and economic relevance and also in new evidences these studies may provide. After the theoretical discussion, this study presents a conceptual model composed of research propositions to be tested by future empirical studies that wish to answer the following question: in small and medium companies there are relations of cause and effect between social and financial performance? The test of the proposals suggested can reveal, among other results, the categories of social performance of SMCs most affected by a higher financial performance, as established by the premises of theoretical slack-resources; if the impact of these categories on the financial performance is qualified by way of management, confirming assumptions of the theory good management, or if there are no significant differences between the social performance of SMEs with higher financial performance and SMEs with low financial performance, revealing the existence of non-financial factors also influence social performance.

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