Journal of Business and Management

Journal of Business and Management

ISSN: 2291-1995 (Print)    ISSN: 2291-2002 (Online)

Volume 4 (2015), No. 1, Pages 18-43

DOI: 10.12735/jbm.v4i1p18

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Relationships between Corporate Social Responsibility and Financial Performance: What is the Causality?

Gerard Hirigoyen1  Thierry Poulain-Rehm2 

1University Departement of Business Administration, Institute of Research into Management Bordeaux University, Bordeaux, France
2University School of Management, La Rochelle University, La Rochelle, France

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This study examines the causal relationships between the various dimensions of corporate social responsibility (human resources, human rights in the workplace, societal commitment, respect for the environment, market behavior and governance) and financial performance (return on equity, return on assets, market to book ratio). It is based on a sample of 329 listed companies in three geographical areas (the United States, Europe and the Asia-Pacific region) for the years 2009 and 2010. Linear regression analysis and the Granger causality test were used to examine the causal relationships between social responsibility and financial performance. The results show not only that greater social responsibility does not result in better financial performance, but also that financial performance negatively impacts corporate social responsibility.

JEL Classifications: G30

Keywords: corporate governance, social responsibility, financial performance

To Cite this Article: Hirigoyen, G., & Poulain-Rehm, T. (2015). Relationships between corporate social responsibility and financial performance: What is the causality? Journal of Business and Management, 4(1), 18-43.

Copyright © Gérard Hirigoyen & Thierry Poulain-Rehm

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This article is published under license to Science and Education Centre of North America. This is an Open Access article distributed under the terms of the Creative Commons Attribution 4.0 International License.

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Relationships between Corporate Social Responsibility and Financial Performance: What is the Causality?