Re-thinking about U: The relevance of regime-switching model in the relationship between environmental corporate social responsibility and financial performance

Lahouel, Béchir Ben; Zaied, Younes Ben; Managi, Shunsuke; Taleb, Lotfi

doi:10.1016/j.jbusres.2021.11.019

Cited by 50 publications

(25 citation statements)

References 153 publications

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“…Our finding corroborates previous studies that have demonstrated a nonlinear relationship between CSR and business performance. In particular, it is aligned with the findings of [27,36], who used the PSTR model to assess if the CSR index reflects a nonlinear two-regime relationship between CSR and firm value. Indeed, [27] found that CSR negatively impacted Taiwanese firm values when companies were in the early stages of investing in CSR.…”

Section: Results and Discusions Of The Pstr Modelsupporting

confidence: 56%

“…Focusing on the context of the European firms, [36] examined nonlinearities between environmental CSR and firm performance among French, German, Italian, and Spanish firms from 2005 to 2017. Using a PSTR model, their findings indicated various relationships spanning from nonlinear positive and nonlinear negative to inverted U-shaped relationships.…”

Section: Mixed Effects Of Csr On Business Performancementioning

confidence: 99%

“…In addition, previous studies have rarely used the PSTR model to investigate the nonlinear relationship between the studied constructs. As far as we know, the studies by [27] and [36] are the only ones that used the PSTR model to assess if the CSR index reflects a nonlinear two-regime relationship between CSR and firm value. However, these studies have been conducted in the context of developed countries.…”

Section: Introductionmentioning

confidence: 99%

“…Nonetheless, once CSR investment surpasses the transition point, the operational performance and reputation of the corporation improves. Furthermore, [36] examined nonlinearities between environmental CSR and firm performance among European firms from 2005 to 2017. Their findings indicate various relationships spanning from nonlinear positive and nonlinear negative to inverted U-shaped relationships.…”

Section: Introductionmentioning

confidence: 99%

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Corporate Social Responsibility and Firm Performance in GCC Countries: A Panel Smooth Transition Regression Model

Ghardallou

Alessa

2022

Sustainability

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There is evidence for mixed effects of corporate social responsibility (CSR) on corporate financial performance. In particular, evidence is reported to be positive, negative, and insignificant. These controversies are generally explained by two opposing schools of thought, which are the social impact hypothesis and the shift of focus hypothesis. This paper attempts to contribute to the ongoing debate by investigating whether the relationship between CSR and firm financial results is nonlinear. Therefore, this research relies on a panel smooth transition regression (PSTR) model in order to calculate the value transition threshold of CSR in 70 Gulf Cooperation Council (GCC) firms from 2015 to 2020, using the CSR composite index and various CSR dimensions, which include environmental, social, and governance transition dimensions. Empirical findings indicate that investment in CSR does not help to boost corporate value until it exceeds the value transition threshold. However, when the marginal benefit exceeds the cost, CSR investment becomes a positive contributor to corporate performance. Furthermore, results indicate that the nonlinear relationship persists when using the individual CSR dimensions, i.e., governmental, social, and environmental CSR measurements. Finally, an interesting finding shows that the social CSR dimension is associated with the highest threshold level. Hence, firms should invest more in the social aspects of CSR in order to see their profitability increase.

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Section: Results and Discusions Of The Pstr Modelsupporting

confidence: 56%

Section: Mixed Effects Of Csr On Business Performancementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Corporate Social Responsibility and Firm Performance in GCC Countries: A Panel Smooth Transition Regression Model

Ghardallou

Alessa

2022

Sustainability

View full text Add to dashboard Cite

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“…Existing works in the literature mainly study the influencing factors of corporate environmental protection from the aspects of corporate reputation [ 17 ], and public opinion pressure [ 18 , 19 ]. Additionally, existing works in the literature study the benefits of environmental protection to enterprises from the perspective of improving market performance [ 20 , 21 ], reducing enterprise risk [ 22 ] and non-linear impact on financial performance [ 23 ]. However, there are few studies on ecological poverty alleviation as a special way of environmental protection.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Government Official Assessment on Ecological Poverty Alleviation: Evidence from Chinese Listed Companies

Huang

2022

IJERPH

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Ecological poverty alleviation launched by the Chinese government is an innovative green development measure that combines targeted poverty alleviation with ecological protection to realize the ecological environmental protection and income growth of the impoverished population. Based on the Chinese government’s policy of poverty alleviation assessment for provincial government officials in 2016, this paper studies whether the assessment of government officials promote enterprises’ participation in ecological poverty alleviation. Using the sample of Chinese A-share listed companies from 2016 to 2020, the empirical test shows that the more important the assessment of poverty alleviation by officials, the more likely local enterprises are to participate in targeted poverty alleviation and the higher the investment level is likely to be. The results pass a series of robustness tests. In addition, this paper further finds that enterprise participation in ecological poverty alleviation can effectively reduce local water pollution, air pollution and solid pollution, thus improving the ecological environment. It suggests that the assessment mechanism of Chinese government officials can effectively promote multi-dimensional ecological poverty alleviation. The contributions of this paper are as follows. Firstly, it is helpful to expand the relevant literature on enterprise environmental protection from the perspective of ecological poverty alleviation. Secondly, it is helpful to expand the literature related to government–enterprise interaction from the perspective of the assessment of government officials. Finally, it is helpful to enrich and expand the relevant literatures on promotion incentives of government officials from the perspective of ecological poverty alleviation.

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Environmental sustainability in health care: An empirical investigation of US hospitals

Han,

Jeong,

Lee

et al. 2024

Bus Strat Env

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Unlike industrial sectors, quality of care is of critical importance in the healthcare sector. Accordingly, incorporating environmental sustainability into healthcare services poses a unique challenge since hospitals must strike a balance among service quality (i.e., clinical quality and patient experience), cost efficiency, and environmental footprints. However, much prior research has focused primarily on the financial benefits of environmental sustainability, mainly in industrial sectors. Environmental sustainability in relation to service quality remains an underexplored topic in literature. As such, it is still unclear whether a hospital's efforts toward environmental sustainability will pay off since the environmental sustainability mantra of “reduce, reuse, and recycle” may not be suitable for healthcare settings. Drawing upon the premise of a practice‐based view, we investigate environmental sustainability in relation to service quality and financial performance in the U.S. healthcare setting. Specifically, this study examines how a hospital's environmental practices impact its service quality and financial performance. Additionally, we examine whether a hospital's continued efforts toward environmental sustainability can generate enduring performance benefits. Overall, our analysis demonstrates the service quality and financial benefits of environmental sustainability in healthcare. However, persistent efforts only lead to enduring financial benefits, not service‐quality benefits.

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Re-thinking about U: The relevance of regime-switching model in the relationship between environmental corporate social responsibility and financial performance

Cited by 50 publications

References 153 publications

Corporate Social Responsibility and Firm Performance in GCC Countries: A Panel Smooth Transition Regression Model

Corporate Social Responsibility and Firm Performance in GCC Countries: A Panel Smooth Transition Regression Model

The Impact of Government Official Assessment on Ecological Poverty Alleviation: Evidence from Chinese Listed Companies

Environmental sustainability in health care: An empirical investigation of US hospitals

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