Abstract
The relationship between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP) has been widely tested in the international context; however, there are nuances that have not been fully explained, such as the possible influence of socio-environmental disclosure and studies in specific contexts, such as the Brazilian one. In order to contribute evidence on the direction of the relationship and the presence of moderator variables, this paper aims to analyze the CSP-CFP relationship, investigating if social disclosure moderates this relationship. The research sample is composed of companies that were part of the Corporate Sustainability Index (ISE) in the period from 2010 to 2013 and the hypothetical relationships which were tested by panel data regression models. The results show that there is a positive and significant relationship between CSP and CFP in both directions of causality; however, it was found that the disclosure of sustainability reports does not intensify or alter the relationship between these performance variables.
Highlights
Performance studies bring into focus the discussion regarding the relationship between CorporateFinancial Performance and Corporate Social Performance, as well as the causality between these two
There is statistical evidence to state that the Corporate Social Performance (CSP) explains the Corporate Financial Performance (CFP)
There is statistical evidence to state that the CFP explains the CSP
Summary
Financial Performance and Corporate Social Performance, as well as the causality between these two. This discussion has received more emphasis in recent years given the acceleration of Corporate Social Responsibility practices and the importance of the sustainability dimension in organizations. Social Performance (CSP) has been analyzed by various studies, such as those of Waddock and Graves (1997), Orlitzky, Schmidt, and Rynes (2003), Chang, Oh, and Messersmith (2013), Garcia, Sousa-Filho, and Boaventura (2018), and Fiandrino, Devalle, and Cantino (2019); some propositions supported by different theoretical positions still lack empirical studies, the research proposed in this paper. The literature discussing the relationship between CSP and CFP has advanced in the sense of empirically testing the causality relationship, with many studies in the international context testing whether the relationship is positive, negative, or neutral. This study in particular ratifies the relationship between CSP and CFP and seeks to explore nuances that have not been fully explained, such as the possible influence of socio-environmental disclosure in this relationship in the context of Brazilian organizations
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