An Empirical Study on Corporate Social Performance
The empirical analysis of economic impacts of corporate social performance in this second main section of the thesis proceeds in five steps. The first task is to present the data employed in this study. Section 3.1 will therefore include a qualitative as well as a quantitative examination of the CSP data derived from oekom research ratings. It will also justify the argument that oekom data are more adequate for empirical CSR research than previously used data, and that the only existing study that employs oekom data still leaves many questions unanswered. Moreover, it provides a discussion and descriptive statistics of all financial data and control variables used. Particularly, it will give reasons for the use of Tobin&3x0027;s Q as a market-based measure of financial performance.
Second, to better understand what kind of companies tend to display a good CSP, Sect. 3.2 will analyse the influence of potential CSP drivers. After considering CSP at an aggregated level, the two sub-categories of that rating (social-cultural and environmental rating) will be scrutinised separately to see whether results change in a more differentiated kind of analysis. The results of that section will partly be used to identify possible interaction effects included in the subsequent analysis in Sect. 3.3. After deriving hypotheses as to the relation between five CSP components and Tobin's Q, these will be tested by cross-sectional regression analyses. The then following robustness check of the model will address the econometric problem of endogeneity, which is often involved in the context of regression analyses. Specifically, by means of an instrumental variable regression, it will ask to which degree the results allow for conclusions as to the causal relations between CSP and financial performance.
KeywordsBusiness Ethic Corporate Governance Ordinary Little Square Instrumental Variable Socially Responsible Investment
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