Corporate Social Responsibility and Corporate Performance: Evidence from a Panel of {US} Listed Companies

  • Becchetti L
  • Giacomo S
  • Pinnacchio D
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investigate whether inclusion in Domini social index affects performance
( ROE and conditional Volatility) for around 1000 firms in a 13 year
interval by controlling for size, industry, business cycle and FE.
Mention opposed to SR costs the gains: reputational capital, intrinsic
motivation based on the two leading fields social preferences and
gift exchange models. Employ panel tests for statioinarity: Fisher's
test developed by Maddala and Wu (1999) (H_0: all series are non
stationary & with 2 alternatives) and add the Im-Pesaran-Shin (2003)
diagnostic (H_0 all series are nonstationary tested against heterogeous
alternative). Perform then the cointegration test of Nyblom and Harvey
(2000) and find a a common stochastic trend and can therefore estimate
the model in levels. Permanence in DI is associated with 13 % higher
total sales by employee after controlling among others for size.

They find relatively lower ROE for SR firms and test if this might
be due to lower risk: Estimate Volatility with a GARCH(1,1) model.
THE DI firms have relatively lower conditional volatility and also
reduced volatility reaction to large shocks.

Author-supplied keywords

  • corporate performance
  • social responsibility
  • stakeholders

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  • Leonardo Becchetti

  • Stefania Di Giacomo

  • Damiano Pinnacchio

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