Corporate Social Responsibility and Corporate Performance: Evidence from a Panel of US Listed Companies

Becchetti, Leonardo; Giacomo, Stefania Di; Pinnacchio, Damiano

doi:10.2139/ssrn.871402

Cited by 58 publications

(82 citation statements)

References 51 publications

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“…Instead, this paper captures a firm-specific perspective. Similar to McWilliams and Siegel (2000) and Becchetti et al (2008), we econometrically analyze the effect of the inclusion in a sustainability stock index on corporate financial performance (i.e. return on assets and Tobin's Q) on the basis of firm-level data.…”

Section: Introductionmentioning

confidence: 99%

“…Finally, we consider a specific sustainability stock index, namely the DJSI World, which is indeed popular in the SRI discussion, but has (to our knowledge) not been microeconometrically examined so far with respect to the analysis whether it pays to be included in this index. In contrast, both McWilliams and Siegel (2000) and Becchetti et al (2008) refer to the inclusion of US firms in the Domini 400 Social Index.…”

Section: Introductionmentioning

confidence: 99%

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Is it Beneficial to be Included in a Sustainability Stock Index? A Panel Data Study for European Firms

Ziegler

2011

Environ Resource Econ

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Is it Beneficial to be Included in a Sustainability Stock Index? A Panel Data Study for European Firms AbstractThis paper empirically examines the effect of the inclusion in one of the most prominent sustainability stock indexes, namely the Dow Jones Sustainability World Index (DJSI World), on corporate financial performance. On the basis of panel data for European firms that were included in the Dow Jones Stoxx 600 Index over time, our micro-econometric analysis confirms the relevance of unobserved firm heterogeneity since the validity of restricted pooled regression models is statistically rejected in favor of random or fixed effects models. As a consequence, the strong positive impacts of the inclusion in the DJSI World on return on assets and Tobin's Q in pooled regression models become weaker and less robust in the case of return on assets and even insignificant for Tobin's Q in the flexible panel data models that include unobserved firm heterogeneity. Therefore, we conclude that the application of misspecified panel data approaches, similar to cross-sectional models, can lead to biased parameter estimates and thus to premature conclusions with respect to the impact of corporate sustainability performance on financial performance. Our estimation results can be explained by the high number of confounding financial effects of corporate environmental or social activities. Another explanation for the predominant weak or neutral impacts of the inclusion in the DJSI World could be the composition of this stock index, which is influenced by factors that need not necessarily be directly connected to corporate environmental or social activities.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Is it Beneficial to be Included in a Sustainability Stock Index? A Panel Data Study for European Firms

Ziegler

2011

Environ Resource Econ

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“…Os pesquisadores que defendem a perspectiva negativa entre desempenho em sustentabilidade e desempenho financeiro argumentam que é muito alto o custo para manter o investimento (Becchetti et al, 2005).…”

Section: Sustentabilidade Socioambiental E Desempenho Da Empresaunclassified

“…Custos que são contrários aos interesses dos investidores, representando uma realocação de recursos da empresa para seus stakeholders externos (McGuire et al, 1988;Becchetti et al, 2005;Barnett, 2005).…”

Section: Sustentabilidade Socioambiental E Desempenho Da Empresaunclassified

The usefulness of the BrF_Score for firms not adherent to the Corporate Sustainability Index (ISE)

Maia

Nossa

Galdi

et al. 2016

BASE

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Este é um artigo de acesso aberto, licenciado por Creative Commons Atribuição 4.0 International (CC BY 4.0), sendo permitidas reprodução, adaptação e distribuição desde que o autor e a fonte originais sejam creditados. Palavras-chave: BrF_Score, governança corporativa, retorno anormal. A UTILIDADE DO BRF_SCORE PARA AS EMPRESAS NÃO PARTICIPANTES ABSTRACTThis study aimed at checking whether there is a relation between abnormal return and the BrF_Score and also at checking the relation between abnormal return and the interaction between high and low BrF_Score and the fact that the company is not included in the ISE. The investment strategy of Lopes and Galdi (2007) was used to separate enterprises in the stock market in high and low Score and to analyze whether they had positive abnormal returns. The study also employed the theoretical framework of Kanagaretnam et al. (2007), Galdi (2008, and Kahyaoglu and Bozkus (2010), who claim that the use of a fundamentalist analysis may bring higher abnormal returns to companies with a low level of governance. This is due to the fact that the information asymmetry is bigger in companies with a lower level of corporate governance than in those with a higher level of corporate governance. 320 companies listed on

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“…Becchetti, Giacomo and Pinnacchio (2005) investigate whether the inclusion and permanence in the Domini social index affects corporate performance. They find that inclusion into the Domini index is associated with a significant increase in total sales per employee but a reduction in return on equity.…”

mentioning

confidence: 99%

The Relative Valuation of Socially Responsible Firms: an Exploratory Study

Fatemi¹,

Fooladi²,

Wheeler³

2009

Finance for a Better World

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In this paper we develop a model in support of the argument that the imposition of a "social responsibility" constraint could lead to increased profitability of the firm. To empirically test this, we compare the characteristics of firms making up the DS 400 index with that of a control group of firms not included in the DS 400. We find that socially responsible firms are, at a minimum, not dominated by their peer firms on the basis of returns. They are also not dominated by their peers on the basis of their betas, but dominate them on the basis of their degree of unique risk. Our analysis also indicates that a socially responsible orientation does not come at a cost to the shareholders. To the contrary, it appears that these firms provide their investors with risk/return opportunities that are at least equal to, and at time superior to, those provided by their peers. We find strong evidence indicating that socially responsible firms employ significantly less leverage in their capital structure. Finally, we find that firms that are added to (deleted from) the DS 400 Index experience a positive (negative) abnormal returns on the occasion of such announcements. AbstractIn this paper we develop a model in support of the argument that the imposition of a "social responsibility" constraint could lead to increased profitability of the firm. To empirically test this, we compare the characteristics of firms making up the DS 400 index with that of a control group of firms not included in the DS 400. We find that socially responsible firms are, at a minimum, not dominated by their peer firms on the basis of returns. They are also not dominated by their peers on the basis of their betas, but dominate them on the basis of their degree of unique risk. Our analysis also indicates that a socially responsible orientation does not come at a cost to the shareholders. To the contrary, it appears that these firms provide their investors with risk/return opportunities that are at least equal to, and at time superior to, those provided by their peers. We find strong evidence indicating that socially responsible firms employ significantly less leverage in their capital structure. Finally, we find that firms that are added to (deleted from) the DS 400 Index experience a positive (negative) abnormal returns on the occasion of such announcements.2

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Corporate Social Responsibility and Corporate Performance: Evidence from a Panel of US Listed Companies

Cited by 58 publications

References 51 publications

Is it Beneficial to be Included in a Sustainability Stock Index? A Panel Data Study for European Firms

Is it Beneficial to be Included in a Sustainability Stock Index? A Panel Data Study for European Firms

The usefulness of the BrF_Score for firms not adherent to the Corporate Sustainability Index (ISE)

The Relative Valuation of Socially Responsible Firms: an Exploratory Study

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