CSR and financial performance: complementarity between environmental, social and business behaviours

2014/06/11 by Sandra Cavaco, Patricia Crifo · 3 citations
Business, Management and Accounting · #Corporate Social Responsibility Reporting #Environmental Sustainability in Business #Sustainable Supply Chain Management

paper · doi:10.1080/00036846.2014.927572

Abstract

This article analyses the interactions between various dimensions of corporate social responsibility (CSR) that mediate the relationship between CSR and financial performance. We hypothesize that the absence of consensus in the empirical literature on the CSR-financial performance relationship may be explained by the existence of synergies (complementarity) and trade-offs (substitutability) between the different CSR components. We investigate such relationship using a final unbalanced panel sample of 1094 observations (around 300 firms per year) from 15 countries over the 2002-2007 period. Our results show that responsible behaviours towards employees (human resources dimension) and towards customers and suppliers (business behaviour dimension) appear as complementary inputs of financial performance, indicating mutual benefits and less conflict between those stakeholders. Conversely, responsible behaviours towards customers and suppliers and towards the environment appear as substitutable inputs of financial performance, suggesting more conflict between or over-investment towards those stakeholders.

Citations

• Misery Loves Companies: Rethinking Social Initiatives by Business
• Biases in Dynamic Models with Fixed Effects
• Instrumental Variables Regression with Weak Instruments
• Individual and Corporate Social Responsibility

Cited by

• A Contemporary Issue of Micro-Foundation of CSR, Employee Pro-Environmental Behavior, and Environmental Performance toward Energy Saving, Carbon Emission Reduction, and Recycling. [europepmc]
• CSR initiatives, organizational performance and the mediating role of integrating CSR into management control systems: Testing an inclusive model within SMEs in an emerging economy. [europepmc]
• Is CSR the panacea for SMEs? A study of socially responsible SMEs during economic crisis. [europepmc]

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