Corporate environmental responsibility and financial performance: does bidirectional causality work? Empirical evidence from the manufacturing industry

Testa, Mario; D’Amato, Antonio

doi:10.1108/srj-02-2016-0031

Cited by 72 publications

(63 citation statements)

References 54 publications

(58 reference statements)

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“…We use the manufacturing data because their operations have direct impacts on societies and the environment. This is consistent with the study conducted by Testa and D'Amato (2017). Corporate performance is proxied by viewing at the total return on assets (ROA) since it describes the level of management effectiveness in generating profit using existing corporate assets.…”

Section: Data Collection Proceduressupporting

confidence: 82%

CSR Expenditure and Company Performance: Charity or Signal? Evidence from Indonesia

Widiastuty

Soewarno

2019

QIP Journal

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Purpose:The purpose of this study are: first, to investigate CSR expenditures made by public companies in Indonesia are whether aimed at the charity, and second, whether CSR expenditure is related to the corporate's performance in the future.Methodology/Approach: The samples are taken from 53 companies registered at the Indonesia Stock Exchange. Measurement of CSR expenditure uses monetary unit because CSR expenditure is the actual expenditure of the company. Company performance variables use ROA and CFO. Findings:The result indicates that CSR expenditures by companies in Indonesia are aimed at charity and are not related to their future performance. In addition, the CFO is also not related to CSR expenditure. This finding indicates that the expenditure of corporate CSR in Indonesia is only limited to fulfilling corporate social responsibility to the community without expecting repayment and to fulfill applicable regulatory obligations. Thus the resulting decision is a charity decision, not a signal.

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Section: Data Collection Proceduressupporting

confidence: 82%

CSR Expenditure and Company Performance: Charity or Signal? Evidence from Indonesia

Widiastuty

Soewarno

2019

QIP Journal

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“…In line with previous and recent studies [16][17][18][19], in our model we considered CFP as the independent variable (IV). In particular, we used Return on Assets (ROA) to quantify CFP because this measure is identified by the majority of studies as the cumulative accounting-based proxy for measuring these type of firms' performance [19,55].…”

Section: Methodsmentioning

confidence: 98%

“…Therefore, we set a one-year time lag between the DV, the IVs and the control variables in the model. This model setting aims to analyze the time-series lead-lag interactions between the predictor and the explanatory variables and to examine the possible virtuous cycle between previous CFP and R&D investments and successive CSP, as highlighted by prior studies [16][17][18][19]48].…”

Section: Methodsmentioning

confidence: 99%

CSR Strategic Approach, Financial Resources and Corporate Social Performance: The Mediating Effect of Innovation

Ruggiero

Cupertino

2018

Sustainability

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Given the current undefined relational effect between corporate financial performance (CFP) and corporate social performance (CSP) and the potentially myopic behavior of managers, this paper answers the call from some scholars to contribute towards a better understanding of the relationship between CFP and CSR. Different from other papers, it does so by analyzing the role of innovation activities as a mediator between CFP and CSR, applying a regression and mediation analysis between firms’ financial resources, innovation initiatives, and social and environmental performance. The results demonstrate that innovation is a critical factor in the relationship between CFP and corporate social performance (CSP) as it enables organizations to respond to new economic, social and environmental challenges faster and better than organizations that are not able to innovate. Therefore, the investment of financial resources in innovation initiatives is one of the most important levers to pursue and to increase CSP.

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“…Other approaches include [25,26] for Chinese listed companies and [27], which enriches the analysis allowing for the potential existence of bidirectional causality [28,29].…”

Section: Introductionmentioning

confidence: 99%

Sustainability Matter and Financial Performance of Companies

2017

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Abstract:The relationship between social and environmental performance and financial performance in companies has been a subject widely debated in the literature but the results obtained to date are not conclusive. This research employs the fuzzy-set qualitative comparative analysis (fsQCA) and offers new evidence on the relationship between both types of performance in a sample of companies listed in the Spanish capital market. Financial performance is measured by the return on equity (ROE) ratio, variable that is widely used in Finance and Accounting related research. The corporate performance of the company is measured by its inclusion or not in the sustainability index used as reference for the Spanish capital market, the FTSEGood4 IBEX. The model also incorporates other business variables that might affect the relationships between both types of performance, such as return on assets (ROA) ratio, company size, debt ratio, and industry. The results suggest that, for specific industries, return on assets is a necessary condition for companies with leverage to reduce the cost of debt due to their sustainability profile and consequently boost their ROE.

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Corporate environmental responsibility and financial performance: does bidirectional causality work? Empirical evidence from the manufacturing industry

Cited by 72 publications

References 54 publications

CSR Expenditure and Company Performance: Charity or Signal? Evidence from Indonesia

CSR Expenditure and Company Performance: Charity or Signal? Evidence from Indonesia

CSR Strategic Approach, Financial Resources and Corporate Social Performance: The Mediating Effect of Innovation

Sustainability Matter and Financial Performance of Companies

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