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The Impact of Four Types of Corporate Social Performance on Reputation and Financial Performance

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  • Yijing Wang
  • Guido Berens

Abstract

The goal of this paper was to investigate whether and how a firm that engages in different kinds of corporate social performance (CSP) can create a favorable corporate reputation among its stakeholders, and as a result achieve a good financial performance. Building on stakeholder theory, we distinguish two types of reputation—reputation among public stakeholders and reputation among financial stakeholders. We argue that CSP activities affect these two reputations differently. In addition, we empirically test the relationship among different types of CSP, reputation among public and financial stakeholders, and financial performance. Our results suggest that (1) Carroll’s four types of CSP (i.e., economic, legal, ethical, and philanthropic) affect financial performance differently, and (2) their effects are mediated by reputation among public and financial stakeholders. Our findings provide guidelines for managers on choosing to emphasize certain CSP aspects in their communication, depending on the specific stakeholder group they are targeting. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Yijing Wang & Guido Berens, 2015. "The Impact of Four Types of Corporate Social Performance on Reputation and Financial Performance," Journal of Business Ethics, Springer, vol. 131(2), pages 337-359, October.
    • Handle: RePEc:kap:jbuset:v:131:y:2015:i:2:p:337-359
    DOI: 10.1007/s10551-014-2280-y
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