1. Investment Inefficiency and Corporate Social Responsibility
- Author
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Tadesse Getacher Engida, Christopher F. Parmeter, Xudong Rao, Alfons G.J.M. Oude Lansink, RS: GSBE other - not theme-related research, and Accounting & Information Management
- Subjects
Economics and Econometrics ,corporate social responsibility ,EFFICIENCY ,INFORMATION ,Bedrijfseconomie ,FIRMS ,CONSTRAINTS ,WASS ,FRONTIER ESTIMATION ,DETERMINANTS ,PERFORMANCE ,NONFINANCIAL DISCLOSURE ,Business Economics ,MANAGEMENT ,Life Science ,Partly linear model ,Stochastic frontier model ,Business and International Management ,Social Sciences (miscellaneous) ,FINANCIAL-REPORTING QUALITY - Abstract
We demonstrate how earlier approaches to model the impact that corporate social responsibility (CSR) has on investment inefficiency are likely to be incorrect and propose use of the stochastic frontier methodology to model this relationship. Weapply the approach to a sample of European listed companies, providing robust evidence that CSR performance is negatively associated with investment inefficiency. This result is consistent with the claim that high CSR firms are characterized by lowinformation asymmetry and high stakeholder solidarity, which may represent a source of competitive advantage, helping to decrease investment inefficiency.
- Published
- 2022