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Are investments in material corporate social responsibility issues a key driver of financial performance?

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  • Guillermo Badía
  • Fernando Gómez‐Bezares
  • Luis Ferruz

Abstract

In this study, we address a lesser‐studied aspect of corporate social responsibility (CSR): distinguishing between investments in material versus immaterial CSR issues. The financial performance of stock portfolios formed according to material and general CSR issues is examined over the period 2007 to 2018 in the European Union and the United States. We find that materiality is relevant to finding the best and worst firms both in terms of CSR and financial performance, more significantly in the EU than in the US market. However, general CSR scores, including material and immaterial issues, do not discriminate the best firms.

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  • Guillermo Badía & Fernando Gómez‐Bezares & Luis Ferruz, 2022. "Are investments in material corporate social responsibility issues a key driver of financial performance?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(3), pages 3987-4011, September.
    • Handle: RePEc:bla:acctfi:v:62:y:2022:i:3:p:3987-4011
    DOI: 10.1111/acfi.12912
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