This study examines the impact of corporate social responsibility (CSR) investment on firm profitability. Prior research has found varying degrees of impact CSR investment will have on a firm finding firms with high CSR ratings exhibit outperformance in regard to market returns when compared to firms not investing in CSR practices. This research will contribute evidence of a link between CSR investment and firm profitability through the relationship between corporate social performance and corporate financial performance. The proposed relationship is seen through the neo-classical theory of profit maximization and is operationalized through empirical analysis of CSR ratings and financial performance returns. This research finds that CSR investments are linked to firm profitability through the marginal production decisions of managers. In order for managers to efficiently implement CSR initiatives into firm activities by expanding their considerations for various relevant stakeholder groups.
Devine, Caroline, "The Efficient Decision of Firms: Does CSR Generate Long-Term Value?" (2019). Senior Independent Study Theses. Paper 8745.
Bachelor of Arts
Senior Independent Study Thesis
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