Corporate Social Responsibility and Operational Inefficiency: A Dynamic Approach

Encarna Guillamon-Saorin, Magdalena Kapelko and Spiro Stefanou
Additional contact information
Encarna Guillamon-Saorin: Department of Business Administration, Universidad Carlos III de Madrid, Calle Madrid 126, 28903 Getafe, Spain

Sustainability, 2018, vol. 10, issue 7, 1-26

Abstract: It is yet to be determined whether the firms’ operational inefficiency is reflected on the Corporate Social Responsibility (CSR) engagement approach. This paper aims to examine this association and specifically analyzes to which of the dimensions of CSR operational inefficiency is more closely related. Operational inefficiency is assessed using Data Envelopment Analysis (DEA) via dynamic inefficiency approach that accounts for the confounding role of adjustment costs related with firms’ investments. Using a sample of U.S. firms in a variety of sectors from 2004 to 2015, we find that lower dynamic inefficiency occurs in firms with a higher commitment to CSR activities. We also find that dynamic inefficiency is negatively related to firms’ engagement in social and corporate governance dimensions of CSR, whereas it is positively associated with the environmental dimension of CSR. In addition, dynamically inefficient companies have higher level of CSR concerns and lower of CSR strengths. The results are robust to endogeneity issues.

Keywords: corporate social responsibility; operational inefficiency; dynamic technical inefficiency; data envelopment analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://www.mdpi.com/2071-1050/10/7/2277/pdf (application/pdf)
https://www.mdpi.com/2071-1050/10/7/2277/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:10:y:2018:i:7:p:2277-:d:155672

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().