The Relationships between Economic, Environmental, Social and Corporate Governance Performance – The Moderating effect of Cultural Belongings of the MSCI 3000 Companies

Pontus Cerin and Sindri Reynisson
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Pontus Cerin: Umeå School of Business at Umeå University, Postal: Umeå, Sweden, http://www.sirp.se
Sindri Reynisson: Royal Institute of Technology (KTH), Postal: Stockholm, Sweden, http://www.sirp.se

No 2010/6, Sustainable Investment and Corporate Governance Working Papers from Sustainable Investment Research Platform

Abstract: Increasingly, information on environmental, social and corporate governance has experienced attention around the world permeating into the focus of not only the general public but corporations, accountants, analysts, investors as well as policy makers. This paper investigates how corporate environmental, social and corporate governance aspects influence economic performance and how they differ between cultural groups. We find a positive relation between a firm's economic performance and it i) having a well functioning and structured board of directors with a fair compensation policy, ii) it being committed and effective in maintaining the company's reputation within the general community and iii) its capacity to increase its workforce loyalty and productivity. Furthermore, once the firms in the sample have been divided into sub-samples according to business culture and geographical position, we find differences in the effects of corporate environmental, social and corporate governance aspects on the financial performance of firms belonging to different sub-samples.

Keywords: Economic environmental social and corporate governance performance; regional corporate governance cultures; ASSET4 data; MSCI 3000 firms (search for similar items in EconPapers)
Pages: 27 pages
Date: 2010-05-22
New Economics Papers: this item is included in nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:hhb:sicgwp:2010_006

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