The relationship between CSR performance and accounting based financial firm performance: The European context
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2019-07-08
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en
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Abstract
This thesis studies the relationship between CSR performance and financial firm performance in the European context. Previous literature show mixed results and there is no consensus on the sign of the relationship. 136 firms from European countries are studied in the period 2013-2017. CSR performance is measured by ESG Scores and financial firm performance is measured by ROA and ROE. The panel data method is used including moderating variables R&D and external assurance. The results show a marginally significant negative relationship and show no moderating effects on the relationship. Additionally a regression with subgroups found a significant negative relationship for firms with a low CSR level. However results of the additional analysis for ROS shows a marginally positive effect. This thesis shows that there are mixed results. The negative results supports the shareholder theory and states that investing in CSR do not increase financial firm performance. However the positive results supports the stakeholder theory which states that investing in CSR can increase financial firm performance. This thesis contributes to the existing literature by studying European firms to fill the research gap and future research is needed to study the sign of the relationship between CSR performance and financial firm performance.
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Keywords: Corporate Social Responsibility (CSR), Environment, Social & Governance (ESG), CSR performance, Financial firm performance, Panel data, Moderating effect, External assurance
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Faculteit der Managementwetenschappen