Why do Firms Do Good? Evidence from Managerial Efficiency

Dam, Lammertjan; Koetter, Michael; Scholtens, Bert

doi:10.2139/ssrn.1361937

Cited by 13 publications

(7 citation statements)

References 37 publications

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“…They find evidence of a "Porter effect" in Mining, Food, and Textile, but for most sectors the effect is non-existing or negative. 3 Dam et al (2009) look at cost and profit efficiency for a range of corporate social responsibility factors (ethical rankings), where environmental issues are included. 4 Our methodology is similar to the approach in Hamamoto (2006).…”

mentioning

confidence: 99%

Environmental Performance and Profits

Lundgren

Marklund

2012

SSRN Journal

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confidence: 99%

Environmental Performance and Profits

Lundgren

Marklund

2012

SSRN Journal

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“…In the business strategy literature, the "pay to be green" debate has focused on the possibility of firms' profiting from reducing their impact on the natural environment [6,43,44]. The findings on the profit-generating effects of environmental sustainability have been inconclusive [2][3][4]. Conventional argument adopted perspective seeing the issues as inevitable trade-offs between the social benefit and the private costs to firms.…”

Section: Is Paying To Be Green Worth It?mentioning

confidence: 99%

“…Whether the benefits of environmental sustainability outweigh the costs and risks is still unclear. The findings on the profit-generating effects of environmental sustainability have been mixed [2][3][4][5][6]. Some have asserted that CER entails costs and hinders economic performance [7,8].…”

Section: Introductionmentioning

confidence: 99%

Going Green Inside and Out: Corporate Environmental Responsibility and Financial Performance under Regulatory Stringency

Sohn¹,

Lee

Kim

2020

Sustainability

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While researchers have long examined the relationship between corporate environmental responsibility (CER) and financial performance, the evidence remains inconclusive. Moreover, whether sustainable supply chain management plays a role in enhancing the financial performance of focal firms has yet to be fully investigated. As firms’ investment in CER often pays off in the long-term, applying multiple time horizons, short- to long-term considerations, is needed to determine the effects of CER. This study examined the role of CER in improving financial performance based on multiple time horizons. In particular, the effects of CER on financial performance were explored in terms of internal operations and supply chains. The moderating effects of regulatory stringency on the relationship between CER and a firm’s short- or long-term financial performance were also investigated. Firms’ CER was studied using carbon data from Trucost. Carbon footprint can be an appropriate proxy for CER, as it provides information on supply partners’ environmental concerns. A unique dataset of the carbon footprint of 714 North American firms in 19 industry sectors in 2003–2010 was used. The results indicated that firms benefit from CER not only in their internal operations but also in their supply chains in both the short and long-terms. The moderating effects of regulatory stringency were significant for CER only in terms of the supply chain but not for internal operations. In industries with a high level of regulatory stringency, the positive effects of CER on short-term financial performance in the supply chain become weaker, but the same effects on long-term financial performance become stronger. By investigating the effects of two distinct carbon footprint aspects on financial performance at different time horizons, this study sheds light on the importance of CER in firms’ internal operations and supply chains.

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“…Note 2. In addition to the strategic and altruistic reasons, the literature also identifies CSR activities inspired by the logic of greenwashing (Baron, 2001;Bé nabou & Tirole, 2010;Dam et al, 2009). Wu and Shen (2013) argue the greenwashing would be neutral from a financial point of view, as it consists of mere attempts to improve the aesthetic image of the bank but without substantially changing the business.…”

Section: Notesmentioning

confidence: 99%

Corporate Social Responsibility and Banks’ Financial Performance

Gangi¹,

Mustilli²,

Varrone³

et al. 2018

IBR

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This study analyzes whether and how corporate social responsibility (CSR) affects the financial performance of the European banking industry. According to agency theory, CSR engagement should be negatively related to financial performance. By contrast, from the stakeholder perspective and according to the resource-based view, CSR should positively impact banks' financial performance. Over a period of six years (2009)(2010)(2011)(2012)(2013)(2014)(2015) following the explosion of the sub-prime crisis, the econometric estimates of the current study confirm a positive effect of CSR engagement on banks' financial performance. Net interest income and profitability increase with the increase in social performance. At the same time, CSR is negatively related to non-performing loans. Therefore, in contrast to the trade-off model, our results support a win-win vision of the relationship between the social and financial performance of banks.

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Why do Firms Do Good? Evidence from Managerial Efficiency

Cited by 13 publications

References 37 publications

Environmental Performance and Profits

Environmental Performance and Profits

Going Green Inside and Out: Corporate Environmental Responsibility and Financial Performance under Regulatory Stringency

Corporate Social Responsibility and Banks’ Financial Performance

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