Corporate Social and Financial Performance: Empirical Evidence from American Companies

Fauzi, Hasan (2013) Corporate Social and Financial Performance: Empirical Evidence from American Companies. ssrn.

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    The objective of this study is to address the issue of the relationship between corporate social and financial performance by moderating company size and financial leverage.with the use of type of industry as control variable. The Corporate social performance (CSP/CSR) is measured using seven item developed initially by Michael Jantzi Research Associate, Inc and used by Mahoney and Robert (2007). To attaint main research objective, the measure of CSP composite is used. Furthermore, company size, financial leverage, and type ofindustry are measured by total asset, degree of intermal and external source to finance the company’s assets, and dummy variable (0 for non manufacture and 1 for manufacture), respectively. A moderated multiple regression model is used in the present study. Four models are developed in the study basedon the theory of slack resiurce and good management. The result of the present study is that corporate social performance (CSP/CSR) has no effect on corporate financial performance (CFP) under slack resource and good management theory it is also shown that only financial leverage could moderate the interaction between CSP/CSR and financial performance (CSP). However, based on the overall analysis, it may be reasonable to come to conclusion that the relationship between CSP and financial performance is spurious as Orlitzki (2000) concluded. Key Words: Corporate social performance, corporate social responsibility, financial performance, good management theory, stakeholder, and slack resource theory.

    Item Type: Article
    Subjects: H Social Sciences > HB Economic Theory
    Divisions: Fakultas Ekonomi > Manajemen
    Depositing User: mr azis r
    Date Deposited: 21 May 2013 21:18
    Last Modified: 17 Mar 2017 10:53

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