Journal article
Do Investors Value a Firm's Commitment to Social Activities?
Journal of business ethics, v 114(4), pp 607-623
01 Jun 2013
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
Previous empirical research has found mixed results for the impact of corporate social responsibility (CSR) investments on corporate financial performance (CFP). This paper contributes to the literature by exploring in a two stage investor decision-making model the relationship between a firm's innovation effort, CSR, and financial performance. We simultaneously examine the impact of CSR on both accounting-based (financial health) and market-based (Tobin's Q) financial performance measures. From a sample of top corporate citizens, we find that: (1) a firm's social responsibility commitment (CSR) contributes to its financial performance; (2) after controlling for investment in innovation activities, CSR continues to have a positive impact on a firm's financial performance; (3) the customer dimension of CSR has a positive effect on both CFP measures, whereas the employee dimension indicates a significant impact only on financial heath; and (4) the community relation dimension of CSR only affects the market-based CFP measure of firms with high innovation intensity.
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Details
- Title
- Do Investors Value a Firm's Commitment to Social Activities?
- Creators
- Waymond Rodgers - University of HullHiu Lam Choy - Drexel UniversityAndres Guiral - Yonsei University
- Publication Details
- Journal of business ethics, v 114(4), pp 607-623
- Publisher
- Springer Nature
- Number of pages
- 17
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Accounting
- Web of Science ID
- WOS:000320313600002
- Scopus ID
- 2-s2.0-84878918565
- Other Identifier
- 991019168782104721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business
- Ethics