Are Firms that Contribute to Sustainable Development Better Financially?

Carmen Pilar Marti*, M. Rosa Rovira-Val, Lisa G.J. Drescher

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

65 Citations (Scopus)


The aim of this study is to analyze the effect exerted by corporate social strategies on (short-term and long-term) corporate financial performance (CFP). To this end, we use data on firms listed in the Stoxx Europe 600 index and Stoxx Europe Sustainability index from 2007 to 2010. On the sample data, we implement random and fixed effects panel data methodology corrected by heteroskedasticity, serial correlation, and/or cross-sectional dependence. The results obtained show that the implementation of corporate social responsibility (CSR) strategy, the level of economic development of the country and firm size determine CFP. In addition, the investment in research and development influences the return on assets while the company's financial slack affects the Tobin's Q. So, companies that contribute to sustainable development incur higher CFP.

Original languageAmerican English
Pages (from-to)305-319
Number of pages15
JournalCorporate Social Responsibility and Environmental Management
Issue number5
Publication statusPublished - 1 Sep 2015


  • Corporate financial performance
  • Corporate social performance
  • Corporate social responsibility
  • European firms
  • Panel data
  • Sustainable development

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