Assessing the Impact of Social Controversies on Financial Performance: Exploring the Moderating Role of Social Performance

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2024-07-01

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en

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The aim of this study was to gain insights into the relationship between social controversies and the financial performance of firms. Additionally, the study examined the moderating effect of financial performance on this relationship. A sample of 502 firms from the S&P 500 between 2017 and 2022 was used for analysis. Multiple linear regression models were employed to investigate the relationships. Contrary to expectations, the results indicated that social controversies did not negatively impact the financial performance of firms. With certain metrics of financial performance, it was found that the occurrence of social controversies, compared to their absence, may positively influence the financial performance of firms. Furthermore, the findings showed that social performance did not moderate the relationship between social controversies and financial performance. In conclusion, this study finds that social controversies do not have a negative impact on the financial performance of S&P 500 firms during the period from 2017 to 2022. Additionally, social performance did not moderate the relationship between social controversies and financial performance, during this same period. The findings of this study highlight the presence of undiscovered relationships within the ESG context. Therefore, this research can serve as a foundation for future studies.

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Faculteit der Managementwetenschappen

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