Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 362: Strategic Corporate Social Responsibility and Economic Performance

Constantin Belu () and Cristiana Manescu ()
Additional contact information
Constantin Belu: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Cristiana Manescu: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG

Abstract: This paper studies the link between Corporate Social Responsibility (CSR) and economic performance of companies. Acknowledging the argument that companies might behave socially responsible strategically, i.e. favoring the CSR dimensions that provide competitive advantages, we construct a novel CSR index based on a Data Envelopment Analysis (DEA) model. We argue that this index accounts for CSR achievements from a strategic perspective, and use it to analyze the link between CSR and economic performance expressed by Return on Assets (ROA). When explicitly accounting for strategic behavior of companies, our findings reveal a significant positive relationship between CSR and economic performance.

Keywords: Corporate Social Responsibility; Data Envelopment Analysis; Strategic CSR; System-GMM

JEL-codes: C23; C67; M14

26 pages, First version: June 11, 2009. Revised: January 1, 2011.

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