Corporate social responsibility and financial performance in a cross-country context: A meta-analysis

Corporate social responsibility (CSR) may be beneficial for enhancing firms’ value according to the instrumental stakeholder theory. Nevertheless, the empirical evidence is inconclusive. We conduct a meta-analysis to synthesize and clarify the heterogeneity of findings from the literature, using data manually gathered from 223 studies in the USA, China, Europe and other regions from 1984 to 2023. We find that the relationship between CSR and corporate financial performance (CFP) is generally positive, which suggests that CSR does improve CFP but differs across the measurements of social and financial performance, which is the strongest when both are measured with surveys. These positive signaling impacts are more likely in China, Africa, and other developing economies. They are more prominent in countries with weaker financial markets, worse environmental performance, feminine culture, and voluntary CSR disclosure. Our inferences emphasize that signaling theory and the institutional-based perspective can jointly contribute to CSR premium research.