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Doing Well or Doing Good: The Relationship between Corporate Social Responsibility and Profit in Romanian Companies

Author

Listed:
  • Camelia-Daniela Hategan

    (Department of Accounting and Audit, Faculty of Economics and Business Administration, West University of Timisoara, 16 Pestalozzi Street, 300115 Timisoara, Romania)

  • Nicoleta Sirghi

    (Department of Economics and Modeling, Faculty of Economics and Business Administration, West University of Timisoara, 16 Pestalozzi Street, 300115 Timisoara, Romania)

  • Ruxandra-Ioana Curea-Pitorac

    (Department of Economics and Modeling, Faculty of Economics and Business Administration, West University of Timisoara, 16 Pestalozzi Street, 300115 Timisoara, Romania)

  • Vasile-Petru Hategan

    (Philosophy and Communication Studies Department, Faculty of Political Sciences, Philosophy and Communication Studies, West University of Timisoara, 4 V. Parvan Blvd, 300223 Timisoara, Romania)

Abstract

The traditional goal of a company is to earn profit to pay its shareholders, but, nowadays, for the business to be sustainable in the long term, a strategy of Corporate Social Responsibility (CSR) activities is needed to meet stakeholder demands, respect ethical principles and give an appropriate answer to organizational stakeholders. The objective of the paper is to identify how strong the correlation between CSR and profit is, and how companies behave in the periods they have losses, whether they continue to do CSR activities, they reduce the activities, or they give them up. Thus, CSR is attributed to the concept of “doing good” and profit to the expression of “doing well”, from which a “positive business” can be built. Our empirical research consists of a panel data econometric model using logistics regressions to highlight the correlation between profit and the decision to do CSR activities and feasible generalized least squares (FGLS) regressions to identify the correlations between the level of CSR activities and the dimension of profit, an expression of financial performance. The main results emphasize that the companies which implement CSR activities in a greater extent are more profitable in economic terms.

Suggested Citation

  • Camelia-Daniela Hategan & Nicoleta Sirghi & Ruxandra-Ioana Curea-Pitorac & Vasile-Petru Hategan, 2018. "Doing Well or Doing Good: The Relationship between Corporate Social Responsibility and Profit in Romanian Companies," Sustainability, MDPI, vol. 10(4), pages 1-23, April.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:4:p:1041-:d:139072
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    References listed on IDEAS

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