scholarly journals Stakeholder Value Creation: Comparing ESG and Value Added in European Companies

2021 ◽  
Vol 13 (3) ◽  
pp. 1392
Author(s):  
Silvana Signori ◽  
Leire San-Jose ◽  
Jose Luis Retolaza ◽  
Gianfranco Rusconi
Keyword(s):  
Decision Making ◽  
Social Responsibility ◽  
Value Creation ◽  
Value Added ◽  
Euro Zone ◽  
Ways Of Thinking ◽  
The Relationship ◽  
Comparison Data

In recent years, a renewed interest in value creation for stakeholders has been witnessed in different contexts. Different tools have been proposed to try to grasp and measure such value(s) but, in many cases, the main perspective remains that of the shareholders. To contribute to the field of research that aims to discuss novel ways of thinking about value creation measurement, this paper addresses the relationship between ESG (Environmental, Social, and Governance) ratings and Value Added, as proxies of value creation and distribution for stakeholders. In particular, we consider whether ESG ratings are able to capture companies that are characterized by their capacity for generating higher Value Added for stakeholders. Our analysis uses the frontier methodology combined with means comparison. Data from 2018 were downloaded from EIKON, for all companies within the Euro zone and for all sectors (1932 companies, of which 399 held an ESG rating, compared with 1533 without ESG analysis). Our analysis reveals that, although ESG is theoretically considered a good social responsibility proxy, ESG indices cannot be used as an indicator of value creation for stakeholders but, rather, must be considered as only one of the components. This implies a need to review the limitations of ESG ratings and establish that the relevant indices are not suitable for use in universal or absolute decision-making.

The reciprocal and nonlinearity relationship between corporate social responsibility and market value added: case study in Indonesia

2020 ◽  
Vol 38 (3) ◽  
pp. 405-417
Author(s):  
John Agustinus
Keyword(s):  
Social Responsibility ◽  
Stock Price ◽  
Positive Relationship ◽  
Value Added ◽  
Market Value ◽  
Content Type ◽  
Parametric Regression ◽  
Market Value Added ◽  
Corporate Social ◽  
The Relationship

PurposeThis study aims to examine the relationship between corporate social responsibility (CSR) and market value added (MVA) through a more comprehensive analysis of the relationship between the two variables.Design/methodology/approachThe population used in this study is all companies listed on the IDX. Sample selection is done by purposive sampling method where the criteria chosen in this research are: listed on the IDX during 2010–2016 and published its annual financial statements completely. The analysis tools using panel parametric regression are based on the reciprocal relationship (MVA related to CSR, and CSR related to MVA). This model should be linearity, based on RESET test. On the other hand, an alternative model is based on a nonlinearity relationship (the linearity of parametric regression is not fulfilled), the modified panel nonparametric regression (accommodates the reciprocal and nonlinearity relationship).FindingsSocial responsibility or CSR shows a positive relationship with MVA, also the MVA has a positive relationship with CSR. This means that when CSR value increases, then MVA also increases, vice versa. When the company discloses CSR, the company maintains good relationships not only with its shareholders but also with other stakeholders including the community and its environment. Therefore, it can enhance the company's perception and reputation to shareholders that the company is a responsible company, in the sense of being responsible not only to shareholders but also to other stakeholders. This then makes shareholders interested to invest their capital in companies with good CSR. Increased capital by shareholders in the form of stock purchases can affect the high or low stock price of a company; if the company price is high, then the higher the value of its MVA because the stock price is an element of MVA.Originality/valueBased on the aforementioned phenomenon, the relationship has the reciprocal characteristics, which means that CSR has a relationship with MVA; on the other hand, MVA also has a relationship with CSR (with a different time lag). Also, this study detects the nonlinearity relationship between variables shown in Fernandes and Fresly (2017). This part as the originality of this paper focused on the reciprocal and nonlinearity relationship between CSR and MVA.

scholarly journals Picking low hanging fruit? Synergies between strategic quality management and corporate social responsibility

2018 ◽  
Vol 24 (6) ◽  
pp. 1393-1411
Author(s):  
Talal Mohammad Alsaif ◽  
Barbara M. Savage ◽  
Deborah M. Reed
Keyword(s):  
Corporate Social Responsibility ◽  
Quality Management ◽  
Social Responsibility ◽  
Research Study ◽  
Value Added ◽  
Content Type ◽  
Corporate Social ◽  
Strategic Quality Management ◽  
The Relationship ◽  
Practical Implications

Purpose The purpose of this paper is to explore and identify the areas in common between strategic quality management (SQM) and corporate social responsibility (CSR) from the literature. Studying these areas is important to develop any further connection between SQM and CSR because of both the potential for benefit to organisations and society, and in order to minimise resources needed for effective action by capitalising on synergies. Design/methodology/approach Literature review covering a broad range of publications that addresses the synergies of quality management and CSR to identify areas of commonality and thus simplify CSR implementation. Findings Identification of opportunities for knowledge transfer between SQM and CSR. Practical implications Synergies between SQM and CSR may offer attractive opportunities to capitalise on prior actions and learning, to enhance the value added to an organisation and the society in which it operates. Originality/value This evaluation is a part of a more in-depth research study investigating the relationship between and integration of SQM and CSR, and its application in specific contexts.

scholarly journals Corporate social responsibility and value creation

2019 ◽  
Author(s):  
Sorush Niknamian
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Value Creation ◽  
Economic Value ◽  
Value Added ◽  
Economic Value Added ◽  
Pooled Data ◽  
Different Dimensions ◽  
Statistical Sample ◽  
Corporate Social

Various studies have studied the effect of corporate social responsibility on the performance of organizations. The recent studies in this field specifically have considered the measurement of corporate social responsibility. The present study is aimed to measure the different dimensions of corporate social responsibility and their impact on the performance of firms based on economic value-added and cash value added. Based on the extensive concept of corporate social responsibility, to evaluate each of economic, legal and ethical dimensions, corporate social responsibility based on Carrol theory has applied a new method to quantify this qualitative concept. The statistical sample consists of 104 firms during 2007 to 2016. To test the study hypotheses, multi-variate regression model and pooled data methods are used. It was found that there was a positive and significant relationship between economic, legal and ethical dimensions of corporate social responsibility and value-added. It means that economic value added and cash value added are affected via corporate social responsibility in different dimensions and are increased.

scholarly journals Corporate social responsibility policies and value creation: does corporate governance and profitability mediate that relationship?

2019 ◽  
Vol 16 (2) ◽  
pp. 270-280 ◽  
Author(s):  
Josua Tarigan ◽  
Saarce Elsye Hatane ◽  
Linneke Stacia ◽  
Deborah Christine Widjaja
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Value Creation ◽  
Structural Equation ◽  
Deep Understanding ◽  
Value Added ◽  
Strong Relationship ◽  
Good Corporate Governance ◽  
Corporate Social

With a purpose to give a deep understanding relating to the manifestation of social responsibilities practices among Indonesian companies, this paper reflects the relationship of corporate social responsibility (CSR), corporate profitability (CP), value creation (VC) and good corporate governance (GCG). Kinder, Lydenberg, and Domini’s (KLD) measurement approach is used in this study to measure the social responsibility practices, as this gives cross-border analysis of social responsibility. Corporate profitability captures return on assets, which is accounting-based measurement, whereas value creation explains the economic value added, which is shareholder-based measurement. Structural Equation Model (SEM) analysis is conducted for Indonesian listed companies, which appeared in Corporate Governance Perception Index (CGPI). The empirical result suggests that CSR serves as a tool in assisting shareholders value and performance. Accordingly, firms should incorporate CSR practices to enhance its strategic investment and sustain a strong relationship with its stakeholders. Subsequently, management should also take concern of having good corporate governance in order to improve company’s performance by supervising and monitoring of the company’s operation, ensure the fulfillment to the stakeholder’s interest. This paper presents fresh insights into applications of corporate social responsibility principles and corporate governance in Indonesian context that has not received systematic attention and consideration in the literature.

The Business Case for Corporate Social Responsibility

2009 ◽  
Author(s):  
Elizabeth C. Kurucz ◽  
Barry A. Colbert ◽  
David Wheeler
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Value Creation ◽  
Business Case ◽  
Value Propositions ◽  
Corporate Social ◽  
The Relationship

The purpose of this article is to provide a general summary of the key value propositions evident in the research on the business case for corporate social responsibility (CSR), described as four general ‘types’ of the business case, or four modes of value creation. It then presents a critique of these approaches (including identifying some problems inherent in the construct of CSR itself) and offers some principles for constructing a ‘better’ business case. Its intent is not to conduct a thorough review of studies analyzing the relationship between CSR and financial performance, as that has been well done elsewhere. Rather it seeks to unearth assumptions underlying dominant approaches in an effort to build a more robust business case for CSR that can move beyond existing limitations.

scholarly journals Peran Corporate Social Responsibility dan Tax Avoidance dalam Mempengaruhi Good Corporate Governance terhadap Value Creation

2019 ◽  
Vol 8 (2) ◽  
pp. 146
Author(s):  
Yenni Mangoting ◽  
Jennifer Priscilla Badalu ◽  
Venny Agustine Gozal ◽  
Stephen Widjaya Pranata
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Value Creation ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Good Corporate Governance ◽  
Analysis Technique ◽  
Corporate Social ◽  
The Relationship

<p>ABSTRAK</p><p>Penelitian bertujuan untuk menguji apakah tanggung jawab sosial perusahaan dan penghindaran pajak dapat memediasi hubungan tata kelola perusahaan dengan penciptaan nilai. Teknik analisis data yang digunakan adalah regresi linear berganda dengan sampel 573 perusahaan multi-sektor yang terdaftar di BEI. Hasil penelitian menunjukkan bahwa kegiatan tanggung jawab sosial perusahaan, penghindaran pajak, dan tata kelola perusahaan berpengaruh pada penciptaan nilai. Selain itu, penghindaran pajak dapat memediasi hubungan antara tata kelola perusahaan terhadap penciptaan nilai. Di sisi lain, penelitian ini membuktikan bahwa penerapan tanggung jawab sosial perusahaan tidak berdampak pada hubungan antara tata kelola perusahaan yang baik dan penciptaan nilai.</p><em>ABSTRACT</em><br /><p><em>This study aims to examine whether corporate social responsibility and tax avoidance can mediate the relationship between corporate governance and value creation. The data analysis technique used is multiple linear regression with a study sample of 573 multi-sector companies </em>that listed<em> on the Indonesia Stock Exchange. The results of the study show that corporate social responsibility activities, tax avoidance, and corporate governance have an effect on value creation. Furthermore, tax avoidance can mediate the relationship between corporate governance and the proportion of value. On the other hand, this research shows that corporate social responsibility does not affect the relationship between good corporate governance and value creation.</em></p>

Tax avoidance, value creation and CSR – a European perspective

2017 ◽  
Vol 17 (5) ◽  
pp. 803-821 ◽  
Author(s):  
Dirk Kiesewetter ◽  
Johannes Manthey
Keyword(s):  
Corporate Governance ◽  
Social Responsibility ◽  
Market Economy ◽  
Value Creation ◽  
Tax Avoidance ◽  
Effective Tax Rate ◽  
Content Type ◽  
Tax Rate ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to answer how corporate governance and corporate social responsibility (“CSR”) affect the relationship between value creation and tax avoidance. This study further analyses the impact of the institutional environment, i.e. whether a country is rather a liberal or a coordinated market economy, on the relationship between CSR and tax avoidance. Design/methodology/approach The empirical analysis comprises a panel data set of 7,924 observations for the years from 2005 to 2014 for European companies. The relationship between value creation and tax avoidance is tested by grouping the sample in high and low CSR performers. Similarly, the impact of the type of market economy is analysed for the firms. Findings The research design does not find evidence that tax avoidance is creating value. The empirical findings reveal that there is a positive relationship between value creation and the effective tax rate for firms with low social and environmental characteristics. Further, this analysis could show that stronger corporate governance is associated with a lower effective tax rate in both coordinated and liberal market economies. The analysis identifies social strengths being associated with a higher effective tax rate for coordinated market economies. Practical implications It is proposed to encourage CSR disclosure. The creation of incentives for social strengths could increase tax revenue. Firms should reconsider whether the engagement in tax avoidance is worth it and pursue social responsibility to achieve higher value creation for their stakeholders. Originality/value The paper challenges the intuitive expectation that tax avoidance creates value. It is suggested that the governance and CSR culture, as well as the tax legislation in Europe, is different to the USA. Conclusively, tax avoidance is not generating value for the European sample.

ANALISIS PENGARUH INTELLECTUAL CAPITAL TERHADAP MARKET VALUE DAN FINANCIAL PERFORMANCE PERUSAHAAN DENGAN METODA VALUE ADDED INTELLECTUAL COEFFICIENT

2007 ◽  
Author(s):  
Yudha Sarpani ◽  
Yeasy Darmayanti
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Value Creation ◽  
Stock Exchange ◽  
Value Added ◽  
Market Value ◽  
Manufacturing Companies ◽  
Book Value ◽  
Capital Efficiency ◽  
The Relationship

The purpose of this research is to investigate the effect of the value creation efficiency of firms’ intellectual capital and firm's market valuation and financial performance. Using 88 manufacturing companies data drawn from Jakarta Stock Exchange (JSX) reporting period 2002 - 2004 and Pulic's Value Added Intellectual Capital Employed Efficiency (VACA), Human Capital Efficiency (VAHU), and Structural Capital Efficiency (STVA) and multiple regression model to examine the relationship between corporate value creation efficiency and firms’ market-to-book value ratio, and explore the relationship between intellectual capital and firms financial and market value. The result is support the fist hypothesis; market value hypothesis that there is significantly effect between intellectual capital and market-to-book value ratio (M/B). The second hypothesis show there are significantly effect between intellectual capital and return on equity (ROE) as financial performance.

scholarly journals Does value added of intellectual capital influence voluntary disclosure? The moderating effect of CSR practices

2020 ◽  
Vol 19 (4) ◽  
Author(s):  
Jamel Chouaibi ◽  
Salim Chouaibi
Keyword(s):  
Social Responsibility ◽  
Intellectual Capital ◽  
Voluntary Disclosure ◽  
Research Question ◽  
Value Added ◽  
Moderating Effect ◽  
Added Value ◽  
Socially Responsible ◽  
Thomson Reuters ◽  
The Relationship

Research Question: Does the effect of corporate social responsibility (CSR) practices and value added of intellectual capital (VAIC), is contingent on the intellectual capital (IC) information disclosure policy adoption in the Environmental, Social and Governance (ESG) companies? Does CSR have a moderating effect on the relationship between VAIC and IC disclosure? Motivation: The majority of the literature has examined the effect of value added and social responsibility on the overall transparency of the business while neglecting their effect on the voluntary intellectual capital disclosure. Our study seeks to fill this gap by testing the moderating effect of socially responsible practices on the relationship between VAIC and voluntary IC disclosure. This paper is the first comprehensive attempt to analyses the interaction between CSR practices and VAIC with voluntary IC disclosure. Idea: This study examines how CSR practices moderate the relationship between the added value of intellectual capital (VAIC) and voluntary disclosure of IC in the world's most committed ESG companies in business ethics. Data: The data were collected from Thomson Reuters ASSET4 database from four countries to analyze data of 153 listed companies selected from the Environmental, Social and Governance (ESG) index between 2015 and 2019. Tools: To test study’s hypotheses, we applied linear regression with a panel data using the Thomson Reuters ASSET4 database. Findings: Two main results can be derived: First, the integration of CSR into company strategy is positively associated with voluntary IC disclosure. Second, the interaction between CSR practices and VAIC is a determinant of this type of disclosure to reduce the asymmetry of information and the conflict of interest. Contribution: The majority of the literature has examined the effect of value added and social responsibility on the overall transparency of the business while neglecting their effect on the voluntary intellectual capital disclosure. Our study seeks to fill this gap by testing the moderating effect of socially responsible practices on the relationship between VAIC and voluntary IC disclosure. This paper is the first comprehensive attempt to analyses the interaction between CSR practices and VAIC with voluntary IC disclosure.

scholarly journals Managerial Performance Measures And Shareholder Value Creation: The Case Of Latin American Companies

2011 ◽  
Vol 3 (9) ◽  
Author(s):  
Eduardo E. Sandoval ◽  
Arturo Z. Vasquez Parraga
Keyword(s):  
Latin American ◽  
Value Creation ◽  
Shareholder Value ◽  
Economic Value ◽  
Value Added ◽  
Strong Correlations ◽  
Managerial Performance ◽  
Relationship Of ◽  
The Relationship ◽  
Different Levels

In this paper we examine whether Economic Value Added (EVATM) is a good predictor of shareholder value creation (SVC) for a group of Latin American companies. We also examine whether EVATM is a better predictor of SVC than competing accounting-based measures of managerial performance. The relationship of these predictors to SVC is paramount in a study of factors influencing shareholder value creation such as the compensation of a firm’s executives. Our results show strong correlations between EVATM and SVC. They also indicate that EVATM outperforms competing measures even after controlling for the potential effects that these last metrics have on SVC. Moreover, they reveal different levels of SVC sensitivity to changes in EVATM across countries and significant differences in EVA’s association with SVC across industries.

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