scholarly journals Corporate Social Performance and Firm Performance: Comparative Study among Developed and Emerging Market Firms

2019 ◽  
Vol 12 (1) ◽  
pp. 26 ◽  
Author(s):  
Irene Wei Kiong Ting ◽  
Noor Azlinna Azizan ◽  
Rajesh Kumar Bhaskaran ◽  
Sujit K Sukumaran
Keyword(s):  
Firm Performance ◽  
Best Practice ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Emerging Market ◽  
Valuation Effects ◽  
Thomson Reuters ◽  
Emerging Market Firms ◽  
Corporate Social ◽  
The Impact

This study examines the impact of firms’ environmental, social and governance (ESG) initiatives on financial performance. It also compares the valuation effects of corporate social performance initiatives in developed and emerging market firms. The study was based on ESG ranking scores in the Thomson Reuters database, and the sample comprised 1317 emerging market firms and 3569 developed market firms. In comparison with developed market firms, emerging market firms had higher ESG combined scores, ESG Controversy scores, category scores of resources use, workforce, human rights and corporate social responsibility strategy scores. This study finds that stakeholder initiatives positively impact valuation effects, based on all sample results. Firm-generated controversies may decrease valuation effects in the stock market. Results indicated that ESG initiatives have a significant positive to the firm performance. The presence of independent board members and ownership by investors is a positive determinant for value creation. The adoption of best practice corporate governance principles is an important determinant of the valuation of firms. Firms’ propensity to use defence mechanisms decreases valuation effects. Developed market firms received positive valuation effects due to ESG initiatives.

Towards a more ethical market: the impact of ESG rating on corporate financial performance

2019 ◽  
Vol 15 (1) ◽  
pp. 11-27 ◽  
Author(s):  
Giovanni Landi ◽  
Mauro Sciarelli
Keyword(s):  
Data Analysis ◽  
Corporate Social Performance ◽  
Stock Exchange ◽  
Social Performance ◽  
Panel Data Analysis ◽  
Abnormal Returns ◽  
Socially Responsible ◽  
Content Type ◽  
Corporate Social ◽  
The Impact

Purpose This paper fits in a research field dealing with the impact of Corporate Ethics Assessment on Financial Performance. The authors argue how environmental, social and governance (ESG) paradigm, meant to measure corporate social performance by rating issuance, can impact on abnormal returns of Italian firms listed on Financial Times Stock Exchange Milano Indice di Borsa (FTSE MIB) Index, developing a panel data analysis which runs from 2007 to 2015. Design/methodology/approach This study aims at exploring whether socially responsible investors outperform an excess market return on Italian Stock Exchange because of their investment behavior, testing statistically the relationship between the yearly ESG assessment issued by Standard Ethics Agency on FTSE MIB’s companies and their abnormal returns. To verify the impact of an ESG Rating on a company’s abnormal return, the authors developed a panel data analysis through a Fixed Effects Model. They measured abnormal returns via Fama–French approach, running a yearly Jensen’s Performance Index for each company under investigation. Findings The empirical results denote in Italy both a growing interest to corporate social responsibility (CSR) and sustainability by managers over the past decade, as well as an improving quality in ESG assessments because of a reliable corporate disclosure. Thus, despite investors have been applying ESG criteria in their stock – picking operations, the authors found a not positive and statistically significant impact in terms of market premium, when they have been undertaking a socially responsible investment (SRI). Practical implications The findings described above show that ethics is not yet a reliable fundraising tool for Italian-listed companies, despite SRIs having a positive growth rate over past decade. Investors seem to be not pricing CSR on Stock Exchange Market; therefore, listed companies cannot be rewarded with a premium price because of their highly stakeholder oriented behavior. Originality/value This paper explores, for the first time in Italy, when market extra-returns (if any) are related to corporate social performance and how managers leverage ethics to build capital added value.

Corporate social responsibility and corporate payout policy: the impact of product market competition

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shahbaz Sheikh
Keyword(s):  
Corporate Social Responsibility ◽  
Firm Performance ◽  
Social Responsibility ◽  
Social Performance ◽  
Market Competition ◽  
Global Reporting Initiative ◽  
Product Markets ◽  
Content Type ◽  
Corporate Social ◽  
The Impact

PurposeThe purpose of this paper is to empirically investigate if and how firm performance in corporate social responsibility (CSR) is related to corporate payouts and how competition in product markets influences this relation.Design/methodology/approachLogit and Tobit regressions are used to estimate the relation between firm performance in CSR and corporate payouts.FindingsThe empirical results show that firm performance in CSR is positively related to the propensity and level of dividends, repurchases and total payouts (dividends plus repurchases). However, the positive relation between CSR performance and corporate payouts is significant only for firms that operate in low competition markets. In high competition markets, CSR performance does not seem to have any significant relation with corporate payouts.Research limitations/implicationsThis study uses MSCI social ratings data to measure net scores on CSR. There is no systematic conceptual reason for measuring social performance using MSCI social ratings. Future research should use other measures of social performance (e.g. Dow Jones Sustainability Index, Accountability Ratings and Global Reporting Initiative to estimate the relation between CSR and corporate payouts).Practical implicationsCSR firms are more likely to choose higher payouts when they operate in low competition markets.Originality/valueThis study contributes to the stream of research that evaluates the payout choices of CSR firms and competition in product markets. To the author's knowledge, this is the first study that documents the impact of market competition on the relation between firm performance in CSR and corporate payouts.

The Impact of Human Resource Management on Corporate Social Performance Strengths and Concerns

2016 ◽  
Vol 56 (3) ◽  
pp. 391-418 ◽  
Author(s):  
Sandra Rothenberg ◽  
Clyde Eiríkur Hull ◽  
Zhi Tang
Keyword(s):  
Resource Management ◽  
Human Resource Management ◽  
Human Resource ◽  
High Performance ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Secondary Data ◽  
Third Party ◽  
Corporate Social ◽  
The Impact

Although high-performance human resource practices do not directly affect corporate social performance (CSP) strengths, they do positively affect CSP strengths in companies that are highly innovative or have high levels of slack. High-performance human resource management (HRM) practices also directly and negatively affect CSP concerns. Drawing on the resource-based view and using secondary data from an objective, third-party database, the authors develop and test hypotheses about how high-performance HRM affects a company’s CSP strengths and concerns. Findings suggest that HRM and innovation are important capabilities because they create and enhance other capabilities.

scholarly journals Impact of Corporate Social Performance on Financial Performance: Case of Firms Listed on the Stock Exchange of Casablanca

2020 ◽  
Vol 2 (1) ◽  
pp. p51
Author(s):  
Lamia Jamel ◽  
Monia Ben Ltaifa ◽  
Ahmed K Elnagar ◽  
Abdelkader Derbali
Keyword(s):  
Financial Performance ◽  
Corporate Social Performance ◽  
Stock Exchange ◽  
Social Performance ◽  
Causal Link ◽  
Return On Equity ◽  
Linear Effect ◽  
Non Linear ◽  
Corporate Social ◽  
The Impact

This paper examines empirically the impact of corporate social performance (CSP) on financial performance (FP). The study relates to a panel of 32 firms listed on the Stock Exchange of Casablanca during the period of study from 2011 to 2017. The empirical findings obtained, by linear regressions on panel data, clearly find the lack of impact of the corporate social performance on the financial performance measured by the Return on Investment (ROI), Return on Equity (ROE) and Earnings Per Share (EPS) ratios. The influence of corporate social performance on financial performance is statistically insignificant. The financial performance of firms classified or not socially efficient are almost identical. Finally, the results obtained clearly show the absence of this causal link between corporate social performance (CSP) on financial performance (FP), which confirms the research hypothesis. Finally, since the relationship between these two performances could be non-linear, we can deepen this article using econometric methods that can analyze the non-linear effect such as quantile regression and the regime-change model.

scholarly journals Desempenho social e financeiro de pequenas e médias empresas: modelo conceitual de causa e efeito

2016 ◽  
Vol 15 (2) ◽  
pp. 60-70
Author(s):  
Jose Elenilson Cruz ◽  
Rafael Barreiros Porto
Keyword(s):  
Financial Performance ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Empirical Studies ◽  
The Social ◽  
Research Propositions ◽  
Object Of Study ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

Corporate social performance can be understood as a way to measure the efficiency of interactions between companies and their main stakeholders. This evaluation has led to some steps forward in research and management implications. One of its main issues, which is the study of the relationship between social and financial performance, focuses on traditional joint-stock companies. This fact reveals a gap concerning the object of study in the literature of the area. The importance of investigating small and medium companies (SMCs) lies in their social and economic relevance and also in new evidences these studies may provide. After the theoretical discussion, this study presents a conceptual model composed of research propositions to be tested by future empirical studies that wish to answer the following question: in small and medium companies there are relations of cause and effect between social and financial performance? The test of the proposals suggested can reveal, among other results, the categories of social performance of SMCs most affected by a higher financial performance, as established by the premises of theoretical slack-resources; if the impact of these categories on the financial performance is qualified by way of management, confirming assumptions of the theory good management, or if there are no significant differences between the social performance of SMEs with higher financial performance and SMEs with low financial performance, revealing the existence of non-financial factors also influence social performance.

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