Corporate Social and Financial Performance: A Canonical Correlation Analysis

摘要: INTRODUCTION The relation between a firm's financial performance and its corporate social (CSP) has been investigated for more than half of century (Preston & O'Bannon, 1997), yet the nature relationship remains unresolved. One view suggests that greater CSP will manifest in superior performance, part because managers who are socially responsible perceived as being likely to generate profits (Alexander Bucholz, 1978). A contrary negative CSP. Although reasons somewhat varied, at root is Friedman's (1970) argument "managerial attention interests other those investors breach trust" 1997, p. 420). Not surprisingly, empirical evidence also spans continuum. Some research shows (Shane Spicer, 1983 Vance, 1975); others show positive (Riahi-Belkaoui, 1992; Waddock Graves, 1997; Margolis Walsh, 2003); some suggest no (Aupperele et al, 1985; Ingram Frazier, 1983); find mixed (Cochran Wood, 1984 Coffey Fryxell, 1991). Griffin Mahon (1997) Callan Thomas (2009) provide comprehensive discussion previous findings. This broad spectrum findings may not be consistent across firm-specific contexts and/or all types actions. Consequently, several causes these varied have identified. For instance, Graves extent varies industries while Russo Fouts related industry growth. Measurement issue researchers frequently combined multiple aspects attributes arrive single measure performance. Further complications arise concerning direction causation (O'Bannon Preston, 1993). On one hand, precursor higher via availability slack resources (McGuire 1990). foster better relations with stakeholder groups which, turn, could lead profitability. current addresses issues by examining separately each firm reported Kinder Lydenburg Domini (KLD) ratings data. Further, analysis performed using canonical correlation which allows interpretation results without imposing an assumption causality. Findings both strengths weaknesses (Mattingly Berman, 2006) but this differs industries. Enhancing our understanding important they strive assess implications their investment strategies. Managers should understand how actions overall value, from perspective increasing maintaining wealth. remainder paper organized follows. next section contains literature review, identifying relationships variables examined prior research. following describes variables, methodology investigation. ends conclusions limitations. LITERATURE REVIEW Predictions on range expecting association end association. school thought predicts effective simply management skills thus Buchholz, …