The CSR-Firm Performance Missing Link: Complementarity Between Environmental, Social and Business Behavior Criteria?

Sandra Cavaco (1) , Patricia Crifo (2, 3, 4)

1 LEM - Laboratoire d'Économie Moderne
2 X-DEP-ECO - Département d'Économie de l'École Polytechnique
3 UPN - Université Paris Nanterre
4 UCL - Université Catholique de Louvain = Catholic University of Louvain

This article analyzes the relationship between corporate social responsibility (CSR) and firm performance by proposing a theoretical model and by testing empirically its main predictions on a matched panel database for the biggest European listed firms over the 2002-2007 period. Our dataset gathers two sources of information: environmental, social and governance (ESG) ratings from the Vigeo database, and economic and financial performance data from the Orbis database. Using the System GMM estimator for dynamic panel data model, we test the complementarity and substitutability, that is the super- and sub- modularity between various corporate social responsibility practices, along with its impact on firm performance. We do observe that a complementarity premium on specific CSR dimensions (human resources and business behavior towards customers and suppliers) exists but also that some practices are relative substitutes (environment and business behaviors).

Mots clés: Corporate social responsibility; supermodularity; panel data

Domaines: Economies et finances; Gestion et management

Sandra Cavaco, Patricia Crifo. The CSR-Firm Performance Missing Link: Complementarity Between Environmental, Social and Business Behavior Criteria?. 2013. ⟨hal-00504747v1⟩