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Corporate Social Performance versus Financial Performance of the Romanian Firms

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  • Marian Siminica
  • Costel Ionașcu
  • Mirela Sichigea

Abstract

This article analyses the relationship between corporate social performance and financial performance at the level of a panel of 62 Romanian companies listed on the Bucharest Stock Exchange. The first challenge was measuring of the social performance. A new social performance measurement system was developed based on which the CSP Index was obtained. The GRI criteria for reporting, the channel of communication chosen by the companies, as well as the level of detail of the published information were taken into account. The estimation of the regression model was made using the CSP Index as the dependent variable and the financial indicators (return on assets, return on equity, sales growth, average number of employees, total sales, market value added, PER index) as the independent variables. The panel regression analysis done to highlight the fixed or random effects at the company level indicated a relatively weak causal relationship between corporate social performance and financial performance. The social performance may also depend on other variables that are not included in the model, although, the general conclusion was that the social performance of Romanian companies is relatively low, but in an ascending evolution.

Suggested Citation

  • Marian Siminica & Costel Ionașcu & Mirela Sichigea, 2019. "Corporate Social Performance versus Financial Performance of the Romanian Firms," Prague Economic Papers, Prague University of Economics and Business, vol. 2019(1), pages 49-69.
    • Handle: RePEc:prg:jnlpep:v:2019:y:2019:i:1:id:687:p:49-69
    DOI: 10.18267/j.pep.687
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    References listed on IDEAS

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    1. Marian Siminica & Liviu Craciun & Adina Dinu, 2015. "The Impact of Corporate Sustainability Strategies on the Financial Performance of Romanian Companies in the Context of Green Marketing," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(40), pages 994-994, August.
    2. Theofanis Karagiorgos, 2010. "Corporate Social Responsibility and Financial Performance: An Empirical Analysis on Greek Companies," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 85-108.
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    Cited by:

    1. Costea Ana-Maria, 2024. "Bibliometric Analysis On The Measurement Of Corporate Performance Of Companies And The Determinants Of It," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 219-233, August.
    2. Marian Siminica & Mirela Cristea & Mirela Sichigea & Gratiela Georgiana Noja & Ion Anghel, 2019. "Well-Governed Sustainability and Financial Performance: A New Integrative Approach," Sustainability, MDPI, vol. 11(17), pages 1-21, August.

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    More about this item

    Keywords

    corporate social performance; financial performance; panel data analysis; regression models with fixed or random effects;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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