earticle

영어

Corporate social performance (CSP) has received increased attention from business, the media, and researchers. Recently-developed theory has provided both normative and positive explanations for CSP. This paper provides an empirical test of a theory that relates corporate financial performance (CFP), CSP, and social pressure. Four positive explanations for a relation between CFP and CSP focus on parties that can reward, or penalize, a firm for its social performance. A firm can be rewarded by consumers, by investors, and by employees and other suppliers of factor inputs. In addition, CSP can deter or deflect potentially harmful social pressure. The fifth explanation is that CSP is a management perquisite, and as such behaves as predicted by agency theory. In addition, CSP could be morally motivated independently of its financial consequences. CFP, CSP, and social pressure are jointly determined, and three-equation and five-equation structural models are estimated for a large universe of firms for 1992-2004. The estimates of the relations among CFP, CSP, and social pressure are consistent with the theory, and the estimated relations are statistically and economically significant. CSP is increasing in lagged CFP and lagged social pressure, and CFP is decreasing in social pressure and increasing in CSP. Social pressure is decreasing in lagged CFP and increasing in lagged CSP and the volatility of returns. Social pressure thus has a direct effect on financial performance and an indirect effect through increased CSP. CSP is also increasing in CEO ownership and the percent of independent directors and decreasing in the external monitoring by institutional investors and financial analysts. The empirical results thus indicate that CFP is penalized by social pressure and improved by CSP as rewarded by consumers, employees, or investors, and CSP is spurred by social pressure and better CFP. The estimates provide limited support for the hypothesis that management and independent board members consume CSP as a perquisite and provide stronger support for the hypothesis that CSP is morally motivated and independent of the competitiveness of the industry, management entrenchment, and external monitoring. The estimates provide strong support for the hypothesis that social pressure is directed to firms that are soft targets as revealed by their past provision of CSP and weak financial performance.