Corporate social responsibility and corporate performance: evidence from a panel of US listed companies

By Leonardo Becchetti, Stefania Di Giacomo, Damiano Pinnacchio. 2005

188 citations recorded by the source corpus.

We investigate whether inclusion and permanence in the domini social index (DSI) affects corporate performance on a sample of around 1000 firms in a 13-year interval by controlling for size, industry, business cycle and time invariant firm idiosyncratic characteristics. Our results find partial support to the hypothesis that corporate social responsibility is a move from the shareholders wealth to a multi-stakeholders welfare target. On the one side, permanence into the domini index (DI) is shown to increase (reduce) significantly total sales per employee (returns on equity but not when large and R&D investing firms are excluded from the sample). On the other side, lower returns on equity for Domini firms seem nonetheless to be accompanied by relatively lower conditional volatility and lower reaction to extreme shocks with respect to the control sample. An explanation for these findings, suggested by the inspection of Domini criteria, is that social responsibility implies, on the one side, decisions leading to higher cost of labour and of intermediate output, but may, on the other side, enhance involvement, motivation and identification of the workforce with company goals with positive effects on productivity.

Subfields: Accounting, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/82bd0d9a56d150a6e0b76a790eb2941f2228c8e8

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Marketing

In Strategy and Management

Citations in the corpus

CSR and financial performance: complementarity between environmental, social and business behaviours (2014, result): “Ignoring both unobservable heterogeneity (as in the pooled OLS model) and the dynamic CSR–financial performance relationship (as in the fixed-effects model) would lead to biased estimates as it has been shown in previous studies (e.g. Becchetti et al., 2008; Baron, 2009).”
Corporate social responsibility and stock market performance (2006, background): “Among them Becchetti et al. (2008) test the effects of entry, exit and permanence in the Domini index on balance sheet data for a sample of around 1000 US firms observed for 13 years with both panel fixed effect and GMM estimates.”
A decade's debate on the nexus between corporate social and corporate financial performance: a critical review of empirical studies 2002–2011 (2014, background): “…and Mullen, 2009; Choi et al., 2010; Moneva and Ortas, 2010; El Ghoul et al., 2011 66123 0.786 0.210 Positive Not significant Moneva et al., 2007; Becchetti et al., 2008; Scholtens, 2008; May and Khare, 2008; Fauzi, 2009; Lee and Park, 2009; Makni et al., 2009; Boesso and Michelon, 2010 Negative…”
Socially responsible and conventional investment funds: performance comparison and the global financial crisis (2015, result): “As is well known in this literature, we have contributions which document a positive nexus (Ahuja and Hart, 1996; Ameer et al., 1997; Russo and Fouts, 1997; Butz and Plattner, 1999; Dowell et al., 2000; Konar and Cohen, 2001; Elfenbein et al., 2007; Becchetti et al., 2008; Baron, 2009), contrasted b”
Valuation effects of corporate social responsibility (2015, background): “Becchetti, Giacomo, and Pinnacchio (2008) examine the performance of firms in the Domini social index.”
Strategic corporate social responsibility and economic performance (2013, methodology): “This has become a standard procedure in the specialized literature, since it has been shown repeatedly that firm ex-ante characteristics matter a great deal when trying to estimate the effects of CSR on profitability (e.g. Becchetti et al., 2008; Baron et al., 2009).”
Corporate Social Performance and Firm Performance: Comparative Study among Developed and Emerging Market Firms (2019, background): “CSP and financial performance are negatively related on the account of costly CSP investments [41].”
Does the stock market value the inclusion in a sustainability stock index? An event study analysis for German firms (2013, unknown): “Finally, a few studies examine the impact of the inclusion in a sustainability stock index, namely the Domini 400 Social Index, on corporate financial performance, measured by accounting data based indicators (e.g., McWilliams and Siegel, 2000, Becchetti et al., 2008).”