Corporate social responsibility and financial performance: the “virtuous circle” revisited

Nelling, Edward; Webb, Elizabeth

doi:10.1007/s11156-008-0090-y

Cited by 481 publications

(374 citation statements)

References 13 publications

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“…However, our results are not consistent with previous studies that suggest CSR has a negative effect on performance [18,19]. Those studies also found no significant CSR-performance linkage [22,23]. The results mean that synergy of CSR could also be generated in M&A activities.…”

Section: Effects Of Csr On Long-term Manda Performancecontrasting

confidence: 99%

“…The results of empirical studies regarding the economic impacts of CSR are also mixed. Some studies have found no significant relationship between CSR and a firm's economic performance [22,23]. Other studies provide evidence of a significant relationship between CSR and corporate performance [24][25][26][27].…”

Section: Corporate Social Responsibility and Firm Performancementioning

confidence: 99%

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Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Qiao

2018

Sustainability

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This study investigates the effects of geographical regions and related-party transactions on corporate social responsibility (CSR) and long-term mergers and acquisitions (M&A) performance linkage. We conduct a Heckman two-stage model analysis, using data from listed firms in the Shanghai and Shenzhen stock exchange markets in China. The results indicate that: (1) buyers' CSR performance has a significant and positive effect on long-term M&A performance. (2) Significant differences exist across geographical regions in the links between CSR and long-term M&A performance. In our study, the effects of CSR on long-term M&A performance were positive and significant in a sub-sample of firms located in the eastern region, but the effects were negative and insignificant in a sub-sample of firms located in regions other than in the east. (3) Related-party M&A transactions experience more positive and significant CSR long-term M&A performance linkage, compared to non-related party M&A transactions. Our findings might provide more robust evidence to CSR performance linkage, as we have examined the linkage in a special context of M&A activities, using a Heckman two-stage model to alleviate endogeneity bias. We also bring further insights into the effects of two contingent factors (geographical regions and related-party transactions) on the CSR-performance linkage. The findings of this article suggest that it is reasonable for firms to act socially responsibly when generating economic benefits. Policy makers should consider how to encourage firms to better fulfill CSR through improving the market environment and by enhancing their levels of supervision.

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Section: Effects Of Csr On Long-term Manda Performancecontrasting

confidence: 99%

Section: Corporate Social Responsibility and Firm Performancementioning

confidence: 99%

Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Qiao

2018

Sustainability

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“…To date, however, the direction of causality remains an open empirical question (Gray et al, 1995(Gray et al, , 2001Brammer & Pavelin, 2006. In our study, drawing upon Nelling & Webb's (2009) application of Granger causality, we explicitly test for causality between our sample firms' profitability and their E and S disclosures.…”

Section: Environmental and Social Disclosures And Profitabilitymentioning

confidence: 99%

Environmental and social disclosures: Link with corporate financial performance

Qiu

Shaukat

Tharyan

2016

The British Accounting Review

676

483

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Abstract:Environmental and social disclosures entail costs, yet increasingly, large listed firms are making higher and better quality disclosures. In this paper we examine the link between a firm's environmental and social disclosures and its profitability and market value. We find that past profitability drives current social disclosures. However, consistent with the existing evidence, we do not find any relation between environmental disclosures and profitability. Further, while prior literature has largely focussed on environmental disclosure, we find that it is the social disclosures that matter to investors. We find that firms that make higher social disclosures have higher market values. Further analysis reveals that this link is driven by higher expected growth rates in the cash flows of such companies. Overall our findings are consistent with the resource based view of the firm and the voluntary disclosure theory, suggesting that firms with greater economic resources make more extensive disclosures which yield net positive economic benefits.

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“…The literature suggests that a "virtuous circle" exists, generated by a combination of the slack resources and good management approaches, which determines that increased CSP leads to improved financial performance and vice versa (Waddock and Graves, 1997a;Hillman and Keim, 2001;Nelling and Webb, 2009;Zhao and Murrell, 2016). The "virtuous circle" between CSP and CFP is tested in the banking sector, formulating the following research hypothesis:…”

Section: Hy2: the Bank's Financial Performance Positively Influences mentioning

confidence: 99%

“…In particular, the theoretical assumptions of the Stakeholder Theory are tested, in order to investigate the existence of an influence of CSP on financial performance (good management approach); at the same time, the effect of financial performance on the CSP is tested (slack resources approach). The final aim of the research is to identify whether both slack resource and good management theory may be operating simultaneously, constituting the existence of a "virtuous circle" between the two performance measures, in the European banking sector (Waddock and Graves, 1997a;Nelling and Webb, 2009). …”

mentioning

confidence: 99%

The "Virtuous Circle" Between Corporate Social Performance and Corporate Financial Performance in the European Banking Sector

Bussoli¹,

Conte²

2018

IJBA

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This paper analyses the relationship between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP) in the European banking sector. The good management approach and the slack resources approach have been tested, and the paper aims to verify the existence of a "virtuous circle" between the two performance measures. The econometric analysis, based on panel data, is performed on a sample of 71 listed banks (EU28) in the period between 2011 and 2015. The main findings show a positive influence of CSP on CFP, confirming the good management approach. However, the results demonstrate a negative influence of CFP on CSP, which generates the impossibility of confirming the theoretical assumptions of the slack resources approach. Therefore, the existence of a "virtuous circle" deriving from the integration of the two approaches is not supported.

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Corporate social responsibility and financial performance: the “virtuous circle” revisited

Abstract: Corporate governance, Corporate culture, Social responsibility, G34, M14,

Cited by 481 publications

References 13 publications

Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Environmental and social disclosures: Link with corporate financial performance

The "Virtuous Circle" Between Corporate Social Performance and Corporate Financial Performance in the European Banking Sector

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