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Jean-michel Sahut, Medhi Mili, Sana Ben Tekaya and Frédéric Teulon
''Financial Impacts and antecedents of CSR: a PLS Path Modelling Approach''
( 2016, Vol. 36 No.2 )
This paper explores the mutual links between corporate social responsibility (CSR), corporate governance (CG), and corporate financial performance (CFP). We aim to investigate the extent to which a firm's internal CG structures may influence its CSR practices and the resulting impact on its financial performances. To take into account the mutual interactions between these variables, we propose a global model, based on the partial least squares path modelling (PLS-PM), using a sample of 486 large U.S. and Europeans firms for the period 2002–2011. Our results highlight a positive impact of corporate governance and financial variables on CSR. The main determinant of CSR is the governance under financial constraints (firm leverage mainly and size). Firms' leverage allows them to obtain more financial resources and positively affects their CSR practices. The adoption of CSR principles is found to increase primarily the firm's accounting performance and secondarily its market performance. However, in our model, we have a double effect; we underline the direct link between CG and financial performance and identify an indirect link between these two variables mediated by CSR. This second relationship, not explored in the literature, reinforces the impact of good CG on financial performance.
Keywords: Corporate social responsibility, CSR, Corporate governance, Performance, Score, Partial least squares.
JEL: G3 - Corporate Finance and Governance: General
C1 - Econometric and Statistical Methods: General
Manuscript Received : Aug 06 2015 Manuscript Accepted : Apr 14 2016

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