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Risk and return efficiency of manufacturing firms: Integrating corporate social responsibility performance

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  • MCarmen Martínez‐Victoria
  • Alfons Oude Lansink

Abstract

This paper uses Data Envelopment Analysis to assess the performance of stocks in terms of return on assets, risk and their Environmental‐Social‐Governance score. Next, latent class analysis (LCA) is used to determine groups with similar performances and relates group membership to a set of covariates. The empirical application employs a set of 139 European manufacturing companies from 2016 to 2021 period. The results suggest stocks on average perform 25% below their potential in each of the three dimensions. The LCA suggests five groups and membership of lower performance classes significantly relates with lower size, R&D expenses and Tobin's Q.

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  • MCarmen Martínez‐Victoria & Alfons Oude Lansink, 2024. "Risk and return efficiency of manufacturing firms: Integrating corporate social responsibility performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 3735-3744, September.
    • Handle: RePEc:wly:corsem:v:31:y:2024:i:5:p:3735-3744
    DOI: 10.1002/csr.2766
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