A decade's debate on the nexus between corporate social and corporate financial performance: a critical review of empirical studies 2002–2011

By Weisheng Lu, K. W. Chau, Hongdi Wang, Wei Pan. 2014

293 citations recorded by the source corpus.

Abstract Theoretical discussions and empirical studies on the nexus between corporate social responsibility/corporate social performance and corporate financial performance have never ceased since the origin of the concepts. The development trajectories of such studies should be articulated with a view to informing practical corporate social responsibility applications and theoretical studies in the future. This paper presents a critical review of relevant empirical research articles on the nexus between corporate social performance and corporate financial performance published during the ten-year period from 2002 to 2011. Using mixed-methods of content analyses and statistical analyses, the paper reviews 84 empirical studies of this kind published during the period. The results indicate that, despite the enormous amount of previous studies, the corporate social performance and corporate financial performance nexus is a line of inquiry that remains inconclusive. The pattern of corporate social performance-corporate financial performance relationship research in the decade examined has shifted towards exploring the linkages between specific aspects of the two constructs. The positive relationships between these specific aspects in dual directions are confirmed by most of the studies examined in this paper. The paper also examines the impact of time and space change on the corporate social performance-corporate financial performance nexus. The findings show that researchers have gradually recognized that the relationship is not static but changes over time. Furthermore, the paper finds that corporate social responsibility has been increasingly debated in developing countries and in specified industrial settings. The review concludes that to explore the corporate social performance-corporate financial performance nexus by contextualizing it in a specified community, and/or examine its dynamics is a promising research area that can yield significant academic and practical values.

Subfields: Building and Construction, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/8cd132afe3c75283a0c2b450aacf3cca59dcbc1c

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Citations in the corpus

Interplay between technological innovation and environmental quality: Formulating the SDG policies for next 11 economies (2020, background): “Bidirectionality is an inherent nature of any national level policy, those are targeted at 21 sustainable development, and various researchers have identified this issue (Lu et al., 2014; Sinha et al., 22 2018).”
Does Corporate Social Responsibility Affect Corporate Tax Aggressiveness (2015, background): “Some academic studies have found a rather positive relationship between social performance and FinPerf (e.g., Lu et al., 2014; Margolis and Walsh, 2003,), while others have found a negative relationship (Kashif et al., 2011).”
Virtuous nexus between corporate social performance and financial performance: a study of construction enterprises in China (2016, methodology): “To explore CSR practices especially CSP-CFP nexus, control variables such as country, industry and company size need to be taken into consideration (Lu et al., 2014; Callan and Thomas, 2009).”
Corporate social responsibility, customer satisfaction, and financial performance: The moderating effect of the institutional environment in two transition economies (2017, background): “On the whole, previous research has mainly focused on the possible positive, neutral, or negative relationships between CSR and financial performance (Lu et al., 2014; Mallin et al., 2014; Wang et al., 2015).”
Exploring environmental, social, and governance disclosure effects on the S&P 500 financial performance (2019, background): “The true nature of the association between the level and type of CSR and performance of the firm has not been determined (Lee, Cin, & Lee, 2016; Lu, Chau, Wang, & Pan, 2014).”
The contents of assurance statements for sustainability reports and information asymmetry (2017, result): “However, prior results regarding a link between sustainability performance and the broader construct of financial performance often show inconsistent results (Orlitzky et al. 2003, Aguinis and Glavas 2012, Lu et al. 2014).”
Technology policy and environmental quality at crossroads: Designing SDG policies for select Asia Pacific countries (2020, background): “For any 13 national level policy towards sustainable development, one of the intrinsic characteristics is 14 bidirectionality (Lu et al., 2014; Sinha et al., 2018).”
Renewable energy policies and contradictions in causality: A case of Next 11 countries (2018, background): “Implications for Theory and Practice Designing renewable energy policy for any nation is a critical aspect, as most of the clean energy policies are bidirectional in nature (Lu et al., 2014; Bot et al., 2015).”