Corporate Social Responsibility and Financial Performance: An Empirical Evidence

Caterina Ghelli

Student thesis: Master thesis


The aim of this thesis is to investigate the strength and direction of the correlation between corporate social responsibility (CSR) and companies’ financial performance. This topic has been long studied by scholars but an agreement has never been reached. The results of the empirical analyses so far show the most diverse outcomes: from a negative correlation to a positive one, including it being neutral. Some of the main issues identified behind this wide range of results, are linked to the way in which the variables are measured, to the sampling technique and to the choice of the control variables. The second objective of this thesis is to understand if an “industry effect” actually exists: it means to verify if the correlation between CSR and financial performance change when studied in a single industry. The relationship has been studied through a series of regressions. The results of the analyses confirm the existence of a positive and significant relationship between corporate social responsibility and financial performance. This relationship goes in both directions, as CSR is influenced and influences at the same time the firms’ financial performance. In addition, industry is found as a variable able to confound the relationship. Corporate social responsibility is a living matter topic and it is still not embraced by everyone; it is necessary to help managers and people in general to understand how crucial this concept is

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2013
Number of pages92