Corporate social responsibility as a signaling technology

Mircea Epure

Review of Managerial Science, 2022, vol. 16, issue 3, No 10, 907-930

Abstract: Abstract This study proposes a production framework in which capital, labor, and corporate social responsibility (CSR) generate sales. Estimating a stochastic frontier on an international sample of large manufacturing firms reveals that CSR has asymmetric effects on efficiency. In a matched sample, the processes of high as compared to low CSR firms are affected less by a crisis shock. This can be largely attributed to the role of CSR as an insurance signal of processes sustainability, especially in market-based as compared to network-oriented contexts. Finally, results show that higher CSR helps firms to mitigate a crisis shock on real effects such as profitability and sales growth; this is mostly because these firms have a higher ability to adjust their operating margins and exhibit lower risk.

Keywords: Corporate social responsibility; Efficiency; Crisis; Profitability; Signaling (search for similar items in EconPapers)
JEL-codes: M1 M14 M21 M41 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11846-021-00472-x

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