Measure the Performance with the Market Value Added: Evidence from CSR Companies

Cristian Carini, Nicola Comincioli, Laura Poddi and Sergio Vergalli
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Cristian Carini: Department of Law, University of Brescia, 25121 Brescia, Italy
Nicola Comincioli: Department of Economics, University of Brescia, 25121 Brescia, Italy
Laura Poddi: University of Ferrara, 44121 Ferrara, Italy

Sustainability, 2017, vol. 9, issue 12, 1-19

Abstract: An increasing number of firms in OECD countries are obtaining certification as Socially Responsible. Literature is sensitive in testing whether there is a relation between firm performance and Social Responsibility certification. In order to overcome problems related to the multiplicity of Corporate Social Responsibility (CSR) definitions and certifications, our work implements a CSR index based on the intersection between two of the three main international indices (Domini 400 Social Index, Dow Jones Sustainability World Index and FTSE4Good Index). By using this database in a panel framework, our work shows that among Corporate Performance Measures (CPF), Market Value Added (MVA) is affected by a firm’s social responsible behaviour and certification. The results support the idea that CSR firms have better long-run performance. Thanks to the reputation effect, they achieve higher sales volumes and profits and a reduction in long-run costs: these effects compensate the costs due to the certification.

Keywords: corporate social responsibility; growth; market value added; firms performance; certification (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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