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Sustainability 2017, 9(9), 1622; doi:10.3390/su9091622

Financial Performance of Socially Responsible Firms: The Short- and Long-Term Impact

1
Department of Accounting and Finance, University of Seville, 41018 Seville, Spain
2
Department of Economics and Social Sciences, Universitat Politècnica de València, 46022 Valencia, Spain
*
Author to whom correspondence should be addressed.
Received: 7 September 2017 / Revised: 7 September 2017 / Accepted: 9 September 2017 / Published: 13 September 2017
(This article belongs to the Section Sustainable Urban and Rural Development)
View Full-Text   |   Download PDF [270 KB, uploaded 13 September 2017]

Abstract

The pressure of society for firms to adopt socially responsible behavior is evident. Yet, Corporate Social Responsibility (CSR) needs an economic justification. In response to this, there exists a comprehensive literature that analyzes the possible relation between social and business financial performance. During the last decade, the literature has been heading toward the carrying out of dynamic studies as researches find that the relationship between social and financial performance is not static. The purpose of this work is to analyze the relevance for the financial performance of Spanish listed firms of maintaining their responsible behavior. To do so, we carry out a comparison between two analyses—one cross-sectional, and the other longitudinal—to be able to conclude whether or not adopting responsible criteria makes a difference in business financial performance in the short and long-term. Some of the results obtained in the cross-sectional study are consolidated in the long-term study. In this sense, responsible firms exhibit a higher systematic risk and have greater size. As a conclusion, be responsible does not mean less stock profitability or a lower business result. It certainly contributes to firms continuing to voluntarily incorporate good corporate social responsibility practices into their business models. What is more, these results support the governmental policies and initiatives that bolster corporate social responsibility. View Full-Text
Keywords: corporate social responsibility; social performance; financial performance; sustainable companies; sustainable index corporate social responsibility; social performance; financial performance; sustainable companies; sustainable index
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Charlo, M.J.; Moya, I.; Muñoz, A.M. Financial Performance of Socially Responsible Firms: The Short- and Long-Term Impact. Sustainability 2017, 9, 1622.

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