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The Robustness of the Corporate Social and Financial Performance Relation: A Second‐Order Meta‐Analysis
Author(s) -
Busch Timo,
Friede Gunnar
Publication year - 2018
Publication title -
corporate social responsibility and environmental management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.519
H-Index - 73
eISSN - 1535-3966
pISSN - 1535-3958
DOI - 10.1002/csr.1480
Subject(s) - reputation , relation (database) , corporate social responsibility , meta analysis , order (exchange) , robustness (evolution) , extant taxon , sample (material) , accounting , business , perspective (graphical) , marketing , economics , public relations , political science , sociology , computer science , social science , finance , medicine , biochemistry , chemistry , chromatography , database , evolutionary biology , artificial intelligence , biology , gene
Abstract For many decades, there has been a debate about the relation between corporate social/environmental performance (CSP) and corporate financial performance (CFP). Our study presents a review of academic research on this topic by applying a second‐order meta‐analysis. The data sample combines 25 previous meta‐analyses yielding a sample size of one million observations. Our results demonstrate a highly significant, positive, robust, and bilateral CSP‐CFP relation. The relation is positive regardless of whether firms focus on ecological or social aspects, though corporate reputation turns out to be a key CSP determinant. We find a particularly strong CSP‐CFP relation for operational CFP. Furthermore, we add a new perspective on potential biases resulting from the studies’ publishing source: social issues‐oriented journals and methodological weaker papers do not distort the positive CSP‐CFP relation. Our conclusion is: Based on the extant literature, the business case for being a good firm is undeniable. © 2018 The Authors. Corporate Social Responsibility and Environmental Management published by ERP Environment and John Wiley & Sons Ltd.