Corporate social responsibility, financial instability and corporate financial performance: Linear, non-linear and spillover effects – The case of the CAC 40 companies

Abderrahmane Jahmane and Brahim Gaies

Finance Research Letters, 2020, vol. 34, issue C

Abstract: This article examines the influence of corporate social responsibility (CSR) on the financial performance (CFP) for CAC 40 companies from 2002 to 2017, considering the effect of financial instability at the macro level. We based our approach on a dynamic modeling of the CFP-CSR relationship, as well as on the generalized method of moments (GMM) to overcome the problem of endogeneity. Our results show that CSR positively affects the CFP in two ways: directly, through an overall positive non-linear effect, and indirectly by mitigating the negative effect of banking crises on the CFP, which is a positive spillover effect.

Keywords: Financial instability; Corporate social responsibility; Corporate financial performance; Endogeneity; Generalized method of moments (GMM); JEL: G30, G34, F41, C02 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:34:y:2020:i:c:s1544612319314576

DOI: 10.1016/j.frl.2020.101483

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