Corporate social and financial performance in different industry contexts: the chicken or the egg?

Anni Tuppura, Heli Arminen, Satu Pätäri and Ari Jantunen

Social Responsibility Journal, 2016, vol. 12, issue 4, 672-686

Abstract: Purpose - The purpose of the paper is to examine empirically Granger causality relationships between corporate social performance (CSP) and corporate financial performance (CFP) in four different industries. Design/methodology/approach - The paper uses the Granger causality test to analyse the causality relationships between CSP and CFP in clothing, energy, food and forest industries in the USA. The panel data used combined CSP and CFP measures over the years 1991-2009. CSP strengths and concerns are handled as distinct constructs. Findings - There is some evidence of bidirectional causality between CSP and CFP in the clothing, energy and forest industries; but in the food industry, CSP appears not to Granger-cause CFP. The results encourage accounting for the industry in empirical analyses, as well as the use of more than one measure for CFP in the analyses. Originality/value - The direction of causality between CSP and CFP has been specifically addressed in only a few studies. Because the causality relationship may, in addition, be concealed when multi-industry data are used, this paper contributes to the literature by examining the Granger causality between CSP and CFP in four different industry contexts using two different measures of CFP.

Keywords: Corporate social responsibility; Granger causality; Panel data; Corporate social performance; Corporate financial performance (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:srjpps:v:12:y:2016:i:4:p:672-686

DOI: 10.1108/SRJ-12-2015-0181

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