A look at corporate social responsibility and firm performance : evidence from South Africa
Date
2011-12-12
Authors
Demetriades, Kimon
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Corporate Social Responsibility (CSR) is a new topic in finance which can be viewed
from two different perspectives: that of the business (CSR), and that of the individual
investor (Socially Responsible Investing, SRI). The evidence from this study
suggested that in the short-term, there were no significant price effects on the SRI
stocks around the announcement dates of the SRI constituent lists. In contrast, the
returns of SRI portfolios over the sample period seemed to be superior to those of
conventional firms. The regression analysis found that generally the SRI coefficients
were insignificant; however using one of the models during the fifteen year period, it
was found that SRI constituents attained a ROE that was 11.18% higher than
conventional peers as well as a ROA that was 1.824% lower than conventional firms.
When the period was restricted to 2004-2009 it was found that social performance
was positively (and sometimes significantly) correlated with ROE.
Description
Keywords
Corporate social responsibility, Socially responsible investing, Financial performance