Journal of Business Ethics 32 (2):143 - 156 (2001)

Stakeholder theory provides a framework for investigating the relationship between corporate social performance (CSP) and corporate financial performance. This relationship is investigated by examining how change in CSP is related to change in financial accounting measures. The findings provide some support for a tenet in stakeholder theory which asserts that the dominant stakeholder group, shareholders, financially benefit when management meets the demands of multiple stakeholders. Specifically, change in CSP was positively associated with growth in sales for the current and subsequent year. This indicates that there are short-term benefits from improving CSP. Return on sales was significantly positively related to change in CSP for the third financial period, indicating that long-term financial benefits may exist when CSP is improved.
Keywords corporate social performance  financial performance  stakeholder theory  transaction cost economics
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Reprint years 2004
DOI 10.1023/A:1010786912118
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Institutional Owners and Corporate Social Performance.Samuel B. Graves & Sandra A. Waddock - 1993 - Proceedings of the International Association for Business and Society 4:1101-1112.
Does the Market Penalize Firms for Socially Irresponsible Behavior?Jeffrey S. Frooman - 1994 - Proceedings of the International Association for Business and Society 5:645-664.

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