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The Value of Being Socially Responsible. A Primal-Dual Approach

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  • Stefanou Spiro E.
  • Puggioni Daniela

Abstract

This paper models Corporate Social Responsibility (CSR) as one of the outputs that results from a firm's decisions regarding what and how to produce. The framework developed allows for studying technical efficiency and deriving a system of internal shadow prices to quantify the value of implementing socially responsible activities. The empirical application focuses on the food and beverage manufacturing sector worldwide. The results indicate high levels of technical efficiency in this sector and document a positive average shadow price of CSR activities, implying that the net value of implementing this kind of activities is positive to the firm as their benefit exceeds the cost. In particular, it is shown that increasing the CSR engagement at the margin positively contributes to the creation of firm value, while reducing it has a negative marginal impact.

Suggested Citation

  • Stefanou Spiro E. & Puggioni Daniela, 2018. "The Value of Being Socially Responsible. A Primal-Dual Approach," Working Papers 2018-12, Banco de México.
    • Handle: RePEc:bdm:wpaper:2018-12
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    Cited by:

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    2. Özge Sahin & Karoline Bax & Claudia Czado & Sandra Paterlini, 2022. "Environmental, Social, Governance scores and the Missing pillar—Why does missing information matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1782-1798, September.
    3. Encarna Guillamon-Saorin & Magdalena Kapelko & Spiro E. Stefanou, 2018. "Corporate Social Responsibility and Operational Inefficiency: A Dynamic Approach," Sustainability, MDPI, vol. 10(7), pages 1-26, July.
    4. Richard D. Smart & Amer Ait Sidhoum & Johannes Sauer, 2022. "Decomposition of efficiency in the global seed industry: A nonparametric approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2133-2147, September.
    5. Gaganis, Chrysovalantis & Pasiouras, Fotios & Tasiou, Menelaos & Zopounidis, Constantin, 2021. "CISEF: A composite index of social, environmental and financial performance," European Journal of Operational Research, Elsevier, vol. 291(1), pages 394-409.
    6. Aparicio, Juan & Kapelko, Magdalena & Ortiz, Lidia, 2023. "Enhancing the measurement of firm inefficiency accounting for corporate social responsibility: A dynamic data envelopment analysis fuzzy approach," European Journal of Operational Research, Elsevier, vol. 306(2), pages 986-997.
    7. Magdalena Kapelko & Alfons Oude Lansink & Encarna Guillamon‐Saorin, 2021. "Corporate social responsibility and dynamic productivity change in the US food and beverage manufacturing industry," Agribusiness, John Wiley & Sons, Ltd., vol. 37(2), pages 286-305, April.
    8. Carlo Drago & Loris Di Nallo & Maria Lucetta Russotto, 2023. "Social Sustainability in European Banks: A Machine Learning Approach using Interval- Based Composite Indicators," Working Papers 2023.13, Fondazione Eni Enrico Mattei.
    9. K. Hervé Dakpo & Yann Desjeux & Laure Latruffe, 2023. "Cost of abating excess nitrogen on wheat plots in France: An assessment with multi‐technology modelling," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(3), pages 800-815, September.
    10. F. Ang & K. H. Dakpo, 2021. "Comment: Performance measurement and joint production of intended and unintended outputs," Journal of Productivity Analysis, Springer, vol. 55(3), pages 185-188, June.
    11. Qingyu Zhang & Tianlong Luo, 2022. "Implications of CSR Practices for a Development Supply Chain in Alleviating Farmers’ Poverty," Mathematics, MDPI, vol. 10(20), pages 1-29, October.
    12. 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.
    13. Magdalena Kapelko & Alfons Oude Lansink, 2022. "Measuring firms' dynamic inefficiency accounting for corporate social responsibility in the U.S. food and beverage manufacturing industry," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(4), pages 1702-1721, December.
    14. Amer Ait Sidhoum, 2023. "Assessing the contribution of farmers’ working conditions to productive efficiency in the presence of uncertainty, a nonparametric approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(8), pages 8601-8622, August.

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    More about this item

    Keywords

    Productivity and competitiveness; Decision processes; Non-parametric technology; Shadow prices; Corporate Social Responsibility;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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