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Does it pay to be really good? addressing the shape of the relationship between social and financial performance

Does it pay to be really good? addressing the shape of the relationship between social and... Building on the theoretical argument that a firm's ability to profit from social responsibility depends upon its stakeholder influence capacity (SIC), we bring together contrasting literatures on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) to hypothesize that the CSP‐CFP relationship is U‐shaped. Our results support this hypothesis. We find that firms with low CSP have higher CFP than firms with moderate CSP, but firms with high CSP have the highest CFP. This supports the theoretical argument that SIC underlies the ability to transform social responsibility into profit. Copyright © 2012 John Wiley & Sons, Ltd. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

Does it pay to be really good? addressing the shape of the relationship between social and financial performance

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References (58)

Publisher
Wiley
Copyright
Copyright © 2012 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
DOI
10.1002/smj.1980
Publisher site
See Article on Publisher Site

Abstract

Building on the theoretical argument that a firm's ability to profit from social responsibility depends upon its stakeholder influence capacity (SIC), we bring together contrasting literatures on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) to hypothesize that the CSP‐CFP relationship is U‐shaped. Our results support this hypothesis. We find that firms with low CSP have higher CFP than firms with moderate CSP, but firms with high CSP have the highest CFP. This supports the theoretical argument that SIC underlies the ability to transform social responsibility into profit. Copyright © 2012 John Wiley & Sons, Ltd.

Journal

Strategic Management JournalWiley

Published: Nov 1, 2012

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