Corporate ethical identity as determinant of firm performance: a test of the mediating role of stakeholder satisfaction

Pascual Berrone (), Jorge Surroca Aguilar and Josep Tribó

DEE - Working Papers. Business Economics. WB from Universidad Carlos III de Madrid. Departamento de Economía de la Empresa

Abstract: In this article, we empirically assess the impact of the Corporate Ethical Identity (CEI) on the firm's financial performance. Drawing on formulation of both normative and instrumental stakeholder theory, we argue that firms with a strong ethical identity achieve greater degree of stakeholder satisfaction, which in turn, positively influence the firms' financial performance. We further analyze two different dimensions of the CEI of firms: corporate revealed ethics and corporate applied ethics. Our results indicate that while revealed ethics has informational worth and enhance shareholder value, applied ethics has a positive impact through the improvement of stakeholder satisfaction. However, revealed ethics by itself (i.e. decoupled from ethical initiatives) is not sufficient to boost economic performance.

Date: 2005-04
New Economics Papers: this item is included in nep-cbe
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Journal Article: Corporate Ethical Identity as a Determinant of Firm Performance: A Test of the Mediating Role of Stakeholder Satisfaction (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:wbrepe:wb053108

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