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Cited by 345Corporate Social Responsibility ReportingCorporate Identity and ReputationEnvironmental Sustainability in Business

The Robustness of the Corporate Social and Financial Performance Relation: A Second‐Order Meta‐Analysis

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Busch, Timo, Friede, Gunnar·2018·Corporate Social Responsibility and Environmental Management
DOI 10.1002/csr.1480
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Abstract

For many decades, there has been a debate about the relation between corporate social/environmental performance (CSP) and corporate financial performance (CFP). Our study presents a review of academic research on this topic by applying a second‐order meta‐analysis. The data sample combines 25 previous meta‐analyses yielding a sample size of one million observations. Our results demonstrate a highly significant, positive, robust, and bilateral CSP‐CFP relation. The relation is positive regardless of whether firms focus on ecological or social aspects, though corporate reputation turns out to be a key CSP determinant. We find a particularly strong CSP‐CFP relation for operational CFP. Furthermore, we add a new perspective on potential biases resulting from the studies’ publishing source: social issues‐oriented journals and methodological weaker papers do not distort the positive CSP‐CFP relation. Our conclusion is: Based on the extant literature, the business case for being a good firm is undeniable. © 2018 The Authors. Corporate Social Responsibility and Environmental Management published by ERP Environment and John Wiley & Sons Ltd.

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  • Several other meta-studies find a more robust positive relation between CSR performance or activities and financial performance.

    “Several other meta-studies find a more robust positive relation between CSR performance or activities and financial performance (e.g., Orlitzky et al. 2003; Busch and Friede 2018; Atz et al. 2020).”

    From Mandatory CSR and sustainability reporting: economic analysis and literature review (2021) · cites this paper as Busch and Friede 2018

  • Studies have shown that integrating sustainability aspects in the organisation is beneficial in terms of reputation, productivity and access to financial resources.

    “Studies have shown that integrating sustainability aspects in the organisation is beneficial in terms of reputation, 47 productivity 48 and access to financial resources.49”

    From Artificial Intelligence and Sustainable Decisions (2023) · cites this paper as Busch and Friede (2018)

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3 of the 166 references couldn’t be matched to a known paper.

Research works printed but not linked: 8

  1. Aldag RJ, Bartol KM. 1978. Empirical studies of corporate performance and policy: A survey of problems and results. In Research in Corporate Social Performance and Policy (Vol. 1), Preston LE (ed). JAI Press: Greenwich, CT; 165-199.
  2. Capelle-Blancard G, Monjon S. 2014. The Performance of Socially Responsible Funds: Does the Screening Process Matter? European Financial Management 20(3): 494-520.
  3. Donaldson T, Preston LE. 1995. Theory the Stakeholder of the Concepts, Evidence, Corporation: and Implications. Management 20(1): 65-91.
  4. Friedman M. 1962. Capitalism and Freedom, 40th Anniv. The University of Chicago Press: Chicago and London.
  5. Levitt T. 1958. The dangers of social responsibility. Harvard Business Review 36(5): 41-50.
  6. McWilliams A, Siegel D. 2000. Corporate Social Responsibility and Financial Performance: Correlation Misspecification? Strategic Management Journal 21(5): 603-609.
  7. O'Shaughnessy KC, Flanagan DJ. 1998. Determinants of layoff announcements following M&As: an empirical investigation. Strategic Manage- ment Journal 19(10): 989-999.
  8. Pavie JJE, Filho LANC. 2008. Corporate social responsibility and financial performance: a meta-analysis. 34th EIBA annual conference paper.

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Authors
Busch, T., & Friede, G.
Affiliations
Universität Hamburg (DE)
Corresponding author
Busch, Timo
ORCID
Venue
Corporate Social Responsibility and Environmental Management
Publisher
Wiley
Published
2018-03-30
Volume
25
Issue
4
Pages
583-608
ISSN
  • 1535-3958 (ISSN-L)
  • 1535-3966
DOI
10.1002/csr.1480
OpenAlex
W2795278713
Cited by
345
References
166
Citations by year
2026: 40 · 2025: 42 · 2024: 56 · 2023: 54 · 2022: 55 · 2021: 49 · 2020: 21 · 2019: 23 · 2018: 4 · 2017: 1
FWCI
40.52
Type
journal article
Language
en
Open access
Licence
Locations
Corporate Social Responsibility and Environmental Management (publishedVersion, cc-by)
Topics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Social Responsibility Reporting
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Identity and Reputation
  • Social Sciences › Business, Management and Accounting › Marketing › Environmental Sustainability in Business
Keywords
corporate social performance, corporate financial performance, corporate reputation, ecological performance, social performance, operational performance, publication bias

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