Original Research
Corporate social responsibility and firm performance in South Africa
Submitted: 29 March 2018 | Published: 31 March 2014
About the author(s)
K. Demetriades, School of Economics and Business Sciences, University of the Witwatersrand, South AfricaC. J. Auret, School of Economics and Business Sciences, University of the Witwatersrand, South Africa
Full Text:
PDF (237KB)Abstract
Corporate Social Responsibility (CSR) can be viewed from two different perspectives: that of the business; and that of the individual investor (Socially Responsible Investing, SRI). In this study regression analysis as well as an event study was used to examine the link between CSR and firm performance. The results suggested that in the short-term there were no significant price effects on the SRI shares. In contrast, the returns of SRI portfolios over the sample period seemed to be superior to those of conventional firms. The regression analysis found that generally the SRI coefficients were insignificant; however using one of the models during the fifteen year sample period, SRI constituents attained a ROE that was 11.18% higher (as well as a ROA that was 1.824% lower) than conventional firms. When the period was restricted to 2004-2009 it was found that social performance was positively - and sometimes significantly - correlated with ROE.
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