Corporate Social Performance and Business Risk

Marc Orlitzky and Diane L. Swanson
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Marc Orlitzky: Pennsylvania State University Altoona
Diane L. Swanson: Kansas State University

Chapter 5 in Toward Integrative Corporate Citizenship, 2008, pp 121-146 from Palgrave Macmillan

Abstract: Abstract The previous chapter suggested that measures of corporate social performance (CSP), such as charitable donations, responsibility to environment, and fair treatment of employees, may be positively correlated with return measures of firm financial performance, such as return on assets (ROA) or stock appreciation. However, true economic performance manifests itself in both high financial return and low financial risk. The possibility that CSP might heighten financial variability and, thus, negate its positive implications for a firm’s level of economic performance has not been explored empirically in any breadth or depth. For example, Frooman (1997) meta-analyzed event studies to show how cases of irresponsible and illicit behaviors impact share price performance. Thus, Frooman’s (1997) study did not focus on risk, used one specific market indicator of corporate financial performance, and approached CSP from the perspective of its absence (and not various degrees of presence).

Keywords: Corporate Social Responsibility; Business Ethic; Social Responsibility; Management Journal; Market Risk (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-59470-8_6

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DOI: 10.1057/9780230594708_6

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