A New Look at the Corporate Social–Financial Performance Relationship

By Heli Wang, Jaepil Choi. 2013

288 citations recorded by the source corpus.

The authors develop the argument that the establishment of good stakeholder relations is influenced not only by a firm’s having a high level of corporate social performance but also by its ability to deliver consistent social performance. Therefore, both level and consistency in corporate social performance should have significant financial implications. More specifically, the authors suggest that level and two types of consistency in corporate social performance—temporal consistency and interdomain consistency—interact positively to influence a firm’s financial performance. Using a sample of 622 firms and 2,365 firm-year observations based on the Kinder, Lydenberg, Domini, & Co. data, the authors found empirical results supporting this argument. In addition, they found that maintaining consistently good social performance is more important for firms with high levels of knowledge intensity.

Subfields: Accounting, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/fabe7308f64a8b45a48cb34ff02e2f333e62b3f4

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Citations in the corpus

Effects of Corporate Social Responsibility on Corporate Financial Performance: A Competitive-Action Perspective (2018, methodology): “Following prior studies (e.g., Hillman & Keim, 2001; Kacperczyk, 2009), we excluded the corporate governance and human rights dimensions to focus on those that represent voluntary corporate activities for primary stakeholders (Wang & Choi, 2013; Tang et al., 2015).”
Corporate Social Responsibility and Firm Value: Disaggregating the Effects on Cash Flow, Risk and Growth (2013, background): “…philanthropy) and with evidence that it is the significant and perpetual levels of investment in stakeholder engagement that are associated with superior financial performance (Barnett and Salomon, 2012; Choi and Wang, 2009; Godfrey et al., 2009; Kim and Statman, 2012; Wang and Choi, 2013).”
The Effect of Environmental, Social and Governance Consistency on Economic Results (2016, background): “Likewise, Wang and Choi [29], considering the same five dimensions of Oikonomou et al.”
Doing good and doing bad: The impact of corporate social responsibility and irresponsibility on firm performance (2017, background): “The confirmation of the different longitudinal patterns of CSR and CSI also contributes to the stakeholder theory, which has long supported the notion that CSR should provide long-term positive effects in addition to an immediate positive impact on the firm (Jones, 1995; Wang & Choi, 2013).”
Examining the Link between Strategic Corporate Social Responsibility and Company Performance: An Analysis of the Best Corporate Citizens (2013, background): “Wang and Choi (2010) examined inter-domain constancy in CSR initiatives of a company toward various stakeholders using a similar measure.”
Firm Litigation Risk and the Insurance Value of Corporate Social Performance (2013, background): “With a few notable exceptions (e.g., Barnett and Salomon, 2006, 2012; Hull and Rothenberg, 2008; Wang and Choi, 2013), previous research has largely overlooked the contingency factors that cause variability in the CSP-CFP relationship.”
When Does It Pay to be Good? Moderators and Mediators in the Corporate Sustainability–Corporate Financial Performance Relationship: A Critical Review (2017, background): “Through advertising intensity (Servaes and Tamayo 2013), high qualitative CS reports (Schreck 2011), and consistent good treatment of different stakeholders over time (Wang and Choi 2013), firms can reduce the information gap, so that stakeholders find out more about the firm’s CS engagement and rew”