an econometric analysis of u s foreign direct investment this paper constructs a theoretical model of foreign direct investment and examines the extent to which the model can explain the level of outward direct investment by u s companies over the last two decades the authors find that market size and factor costs both labor and capital are important factors in the investment decision instrumental variable estimation is used to demonstrate that the expectation of short run fluctuations in the dollar also influences the timing of investment copyright 1996 by mit press

corporate philanthropic disaster response and ownership type evidence from chinese firms response to the sichuan earthquake this article examines whether the charitable giving amount and likelihood of firm response to catastrophic events relate to firms ownership type using a unique dataset of listed firms in china where state ownership is still prevalent based on the data of chinese firms response to the 2008 sichuan earthquake we find that the extent of corporate contributions for state owned firms following this disaster is less than that for private firms state owned firms are also less likely to respond in this disaster compared to private firms the results also reveal that firm size profitability geography cash resource available and leverage affect firms philanthropic disaster response behavior in china

the influence of csr on firm value an application of panel smooth transition regression on taiwan abstractprevious studies on the relationship between corporate social responsibility csr and firm value generally belong to one of the two opposing schools of thought the social impact hypothesis and the shift of focus hypothesis this study however proposes that the relationship between csr and company value is non linear and neither wholly positive nor negative we employed the corporate social responsibility index crsi to test this hypothesis the panel smooth transition regression pstr model was used to analyse listed taiwanese firms from 2010 to 2012 and calculate the value transition threshold of csr using csri as the transition variable we then applied pstr to determine whether csri shows a two regime non linear relationship as inferred by our model empirical findings show that the threshold value of csri is 13 082 thus we concluded that investment in csr does not contribute to enhancing company value until it exceeds the value transition threshold

social norms and csr performance some institutional investors e g pensions universities and religious charitable and not for profit institutions are exposed to social norms and public scrutiny prior research indicates that these norm constrained institutions engage in negative screening and invest less in firms operating in sin industries we examine whether social norms also motivate these institutions to engage in positive screening where they invest more in firms with better corporate social responsibility csr performance and csr related activism where they promote improvements in the csr of existing investees we find that firms with superior csr performance have greater ownership by norm constrained institutions consistent with positive screening and we use a natural experiment to establish causality we also find that increases in the shareholdings of norm constrained institutions are associated with subsequent improvements in csr consistent with activism further we rule out an alternative explanation for our results where the positive screening and activism are profit driven rather than driven by social pressure thus our results suggest that the influence of social norms on stock markets is more pervasive than documented in the prior literature

on the indeterminacy of capital accumulation paths abstract in neoclassical optimal growth models the stability of the accumulation paths depends on the discount parameter we prove that for discount factors small enough the policy function which describes an optimal path can be of any type the result is achieved using the notion of concavity we adopt a constructive approach given any twice differentiable map we show how to construct an optimal growth problem which produces that map as the optimal policy function a consequence is that chaos can appear in these models we also provide bounds on the values of the discount parameter for which indeterminacy is possible

a characterization of erratic dynamics in the overlapping generations model abstract in this paper we characterize and give examples o wide classes of utility functions which generate erratic dynamics in the standard deterministic overlapping generations model erratic dynamics refers to feasible trajectories which are bounded but which do not converge to stationary points or periodic orbits we show that such trajectories are pareto efficient we introduce credit into the model and show how a constant credit expansion rate can result in erratic trajectories in prices and the real value of credit finally we briefly discuss certain technical aspects of the mathematics used and the statistical nature of the dynamics that can arise from deterministic dynamical systems

an empirical test of a cross national model of corporate social responsibility most models of corporate social responsibility revolve around the controversy as to whether business is a single dimensional entity of profit maximization or a multi dimensional entity serving greater societal interests furthermore the models are mostly descriptive in nature and are based on the experiences of western countries there has been little attempt to develop a model that accounts for corporate social responsibility in diverse environments with differing socio cultural and market settings in this paper an attempt has been made to fill this gap by developing a two dimensional model of corporate social responsibility and empirically testing its validity in the context of two dissimilar cultures australia and bangladesh the two dimensions are the span of corporate responsibility narrow to wider perspective and the range of outcomes of social commitments of businesses cost to benefit driven perspective the test results confirm the validity of the two dimensional model in the two environments the factor analysis revealed two leading dimensions cluster analysis pointed to two distinctive clusters of managers in both australia and bangladesh one consisting of managers with a broad contemporary concept of social responsibility and the other with a limited narrow view the paper concludes that corporate social responsibility is two dimensional and universal in nature and that differing cultural and market settings in which managers operate may have little impact on the ethical perceptions of corporate managers

can technology specific deployment policies be cost effective the case of renewable energy support schemes can technology specific deployment policies be cost effective the case of renewable energy support schemes

sunspot equilibria and periodic cycles under idiosyncratic uncertainty abstract this paper investigates how some intrinsic uncertainty affects the existence of sunspot equilibria and deterministic cycles in an overlapping generations model in the model there exists an intrinsic idiosyncratic uncertainty under which each individual has a small probability of losing consumption goods due to the law of large numbers this uncertainty causes no fundamental macroeconomic fluctuation however since it may change the dynamic stability the model may have both stationary sunspot equilibria and deterministic cycles even if the degree of relative risk aversion is small in particular these equilibria can exist even if the probability of loss is negligible

the financial performance of a socially responsible investment over time and a possible link with corporate social responsibility this paper empirically examines the financial performance of a uk unit trust that was initially conventional and later adopted socially responsible investment sri principles ethical investment principles comparison is made with three similar conventional funds whose investment objectives remained unchanged analysis techniques employed in previous studies find similar results mean risk adjusted performance is unchanged by the switch to sri with no evidence of over or under performance relative to the benchmark market index by any of the four funds more interestingly changes in variability of returns over time are also modelled using generalised autoregressive conditional heteroscedasticity models not previously applied to sri funds so far as is known results show a temporary increase in variability of returns followed by a return to previous levels after around 4 years evidence shows the increased variability to be associated with the adoption of sri rather than with a change in fund management possible explanations for the subsequent reduction in variability include the spread of corporate social responsibility activities by firms and learning by fund managers in addition to reporting on a previously unobserved phenomenon this paper raises questions for further research

the drivers of responsible investment the case of european pension funds we investigate what drives responsible investment of european pension funds pension funds are institutional investors who assure the income of part of the population for a long period of time increasingly stakeholders hold pension funds accountable for the non financial consequences of their investments and many funds have engaged in responsible investing however it appears that there is a wide difference between pension funds in this respect we investigate what determines pension funds responsible investments on the basis of a survey of more than 250 pension funds in 15 european countries in 2010 we use multinomial logistic regression and find that especially legal origin of the country ownership of the pension fund and fund size related variables are to be associated with pension funds responsible investment for fund size we establish a curvilinear relationship especially the smallest and largest pension funds in the sample tend to engage with responsible investing

finance as a driver of corporate social responsibility finance is grease to the economy therefore we assume that it may affect corporate social responsibility csr and the sustainability of economic development too this paper discusses the transmission mechanisms between finance and sustainability we find that there is no simple one to one relationship between financial development and sustainable development but there are various often indirect linkages it appears that most of the literature concentrates on the role of public shareholders when it comes to changing corporate policy and performance in a more sustainable direction however this focus neglects the potential impact of the credit channel and private equity on a firm s non financial policies and performance these very powerful mechanisms can govern business policies and practices therefore there appears to be much more scope for finance to promote socially and environmentally desirable activities and to discourage detrimental activities than has been acknowledged in the academic literature so far

stationary sunspot equilibria in a finance constrained economy abstract stationary sunspot equilibria are shown to exist in a production economy with infinite lived agents when it is not possible to borrow against future wage income equilibrium fluctuations exhibit persistence over time scales of the same order of magnitude as observed business cycles an active fiscal policy that stabilizes aggregate money expenditures can prevent such fluctuations

an empirical examination of institutional investor preferences for corporate social performance this study investigates the pattern of institutional shareholding in the u k and its relationship with socially responsible behavior by companies within a sample of over 500 uk companies we estimate a set of ownership models that distinguish between long and short term investors and their largest components and which incorporate both aggregated and disaggregated measures of corporate social performance csp the results suggest that long term institutional investment is positively related to csp providing further support for earlier studies by johnson and greening 1999 academy of management journal 42 564 576 and graves and waddock 1994 academy of management journal 37 1034 1046 disaggregation of csp into its constituent components suggests that the pattern of institutional investment is also related to the form which csp takes investigation of the impact of investment screens on the selection of stocks suggests that long term institutional investors select primarily through exclusion rejecting those firms which have the worst csp

institutional ownership of stock and dimensions of corporate social performance an empirical examination collectively institutions own an increasing proportion of outstanding corporate equities as an emergent force in shaping corporate america the linkages between institutional ownership and corporate social performance csp require empirical examination not only do corporate policy makers need to know those areas where social performance may lure or inhibit capital infusions lawmakers also need a better understanding of the social forces guiding corporate policy as anticipated this study found a positive relationship between the amount of institutional ownership of corporate stock and a company s social responsiveness as measured by the representation of women on its board of directors however no statistically significant relationship with social responsibility as measured by charitable giving was found the exemplar of social issues management compliance with the sullivan principles showed an unexpected negative relationship with the level of institutional ownership

how can a ratings based method for assessing corporate social responsibility csr provide an incentive to firms excluded from socially responsible investment indices to invest in csr socially responsible investment sri indices play a major role in the stock markets a connection between doing good and doing well in business is implied leading indices such as the domini social index and others exemplify the movement toward investing in socially responsible corporations however the question remains does the ratings based methodology for assessing corporate social responsibility csr provide an incentive to firms excluded from sri indices to invest in csr not in its current format the ratings based methodology employed by sri indices in their selection processes excludes many corporations by creating limited membership lists this received ratings based structure is yet to offer an incentive for most of the excluded corporations to invest in improving their levels of csr we therefore ask under what circumstances a ratings based method for assessing csr could provide an incentive to firms excluded from sri indices to invest in csr in this article we attempt to offer a theoretical reply to this question we show that when all firms are publicly ranked according to sri index parameters such indices can indeed create a market incentive for increased investment by firms in improving their performance in the area of social responsibility we further show that this incentive tapers off as the amount of investment required exceeds a certain point or if the amount of payback on that investment fails to reach a certain threshold

corporate social responsibility theories mapping the territory the corporate social responsibility csr field presents not only a landscape of theories but also a proliferation of approaches which are controversial complex and unclear this article tries to clarify the sit uation mapping the territory by classifying the main csr theories and related approaches in four groups 1 instrumental theories in which the corporation is seen as only an instrument for wealth creation and its social activities are only a means to achieve economic results 2 political theories which concern themselves with the power of corporations in society and a responsible use of this power in the political arena 3 integrative theories in which the corporation is focused on the satisfaction of social demands and 4 ethical theories based on ethical responsibilities of corporations to society in practice each csr theory presents four dimensions related to profits political performance social demands and ethical values the findings suggest the necessity to develop a new theory on the business and society relationship which should integrate these four dimensions

family firms corporate social performance a calculated quest for socioemotional wealth this study investigates the engagement of family firms in corporate social responsibility we first compare their corporate social performance csp to non family firms then following recent evidence on the heterogeneity of family firms we examine two factors that may influence csp within family firms the level of family control and the governance orientation of the country in which they operate this research is based on a theoretical framework which considers both agency and socioemotional wealth sew influences on family firms csr engagements overall we find that family firms exhibit lower csp than non family firms but when focusing on family firms our analyses show a curvilinear relationship between family control and csp at lower levels of control family owners invest more in social initiatives to protect their sew beyond a threshold level of control that we estimate at 36 in our sample economic considerations prevail over sew and social performance starts decreasing we also find that family firms operating in stakeholder oriented countries are more attentive to social concerns than those operating in more shareholder oriented countries

the new political economy of taxation in advanced capitalist democracies earlier versions of this paper were presented at the 1999 annual meeting of the american political science association september 1 5 atlanta ga and the 2000 annual meeting of the midwest political science association april 27 30 chicago il the authors thank steffen ganghof philip genschel mark hallerberg alex hicks william keech dennis quinn and the anonymous reviewers and editor of this journal for many helpful comments and dennis quinn for generously sharing data duane swank thanks the german marshal fund of the united states and marquette university for support of work incorporated in this paper data utilized in this paper are available from duane swank marquette edu

shareholder value stakeholder management and social issues what s the bottom line we test the relationship between shareholder value stakeholder management and social issue participation building better relations with primary stakeholders like employees customers suppliers and communities could lead to increased shareholder wealth by helping firms develop intangible valuable assets which can be sources of competitive advantage on the other hand using corporate resources for social issues not related to primary stakeholders may not create value for shareholders we test these propositions with data from s p 500 firms and find evidence that stakeholder management leads to improved shareholder value while social issue participation is negatively associated with shareholder value copyright 2001 john wiley sons ltd

the effects of firm size and industry on corporate giving recent downward trends in corporate giving have renewed interest in the factors that shape corporate philanthropy this paper examines the relationships between charitable contributions firm size and industry improvements over previous studies include an irs data base that covers a much broader range of firm sizes and industries as compared to previous studies and estimation using an instrumental variable technique that explicitly addresses potential simultaneity between charitable contributions and profitability important findings provide evidence of a cubic relationship between charitable giving and firm size and evidence of strong industry effects the plus minus plus regression coefficient sign pattern for the cubic firm size model suggests that small and large firms give more relative to total receipts with lower giving ratios among medium size firms one interpretation for this finding is that small firms are close to the communities they serve while high visibility creates a need for large firm philanthropy strong industry effects provide evidence of inter industry differences in giving culture and or different public relations requirements across industries

corporate social responsibility ownership structure and political interference evidence from china prior research suggests that ownership structure is associated to corporate social responsibility csr in developed countries this article examines whether and how ownership structure affects csr in emerging markets using chinese firms social responsibility ranking our empirical evidences show that for non state owned firms corporate ownership dispersion is positively associated to csr however for state owned firms whose controlling shareholder is the state this relation is reversed we attribute the reversed relationship to political interferences and further test this hypothesis by demonstrating that regional economic development is negatively related to csr for state owned firms due to decreased political interference in more developed areas this study is the first to directly examine the relationship between the dispersion of corporate ownership and csr in emerging markets and our results depict that it is important to consider ownership type in assessing csr in emerging market where state ownership is still prevalent such as china the results also reveal that firm size profitability employee power leverage and growth opportunity affect csr in china

corporate social responsibility and family business in spain despite the economic relevance and distinctiveness of family firms little attention has been devoted to researching their nature and functioning traditionally family firms have been associated both to positive and negative features in their relationships with the stakeholders this can be linked to different orientations toward corporate social responsibility thus this research aims to identify the approaches that spanish family firms maintain about social responsibility based on the model developed by quazi and o brien journal of business ethics 25 33 51 2000 an empirical study carried out for 112 spanish family firms gives support to our initial assumption about these organizations not being a homogeneous group in terms of their orientation towards corporate social responsibility the differences in perceptions do not seem to be associated to biographical characteristics these results lead to some relevant academic and practical implications that suggest interesting lines for future research

on the superneutrality of money in a stochastic dynamic macroeconomic model abstract this paper explores the robustness of the superneutrality of money result to the introduction of uncertainty while qualitatively superneutrality fails to obtain in our model quantitatively the observed tobin effect is insignificant the equilibrium time paths of real variables are nearly unaffected by changes in the money growth rule we argue that our conclusions reinforce the theoretical case for superneutrality

network externality perspective of feed in tariffs fit instruments some observations and suggestions abstract existing energy policy frameworks revolving around the acceleration of deployment 1 of renewable energy technology can be broadly classified as the quantity vs price approach with this brief viewpoint this paper suggests another perspective of viewing these instruments in terms of a more fundamental basis whether the deployment in capacity is in terms of a cost minimization approach or a network externality approach we suggest that the generic price or feed in tariff fit approach in subsidizing renewable electricity generation and associated income would create a bandwagon or self propagation effect among users rendering the renewable energy technology spreads like a software or information technology our objective is to raise awareness of this technology dynamics oriented perspective in renewable deployment supplementing the conventional installation subsidies perspective we hope that it would inspire more empirical works and studies relating to the policy implications of this viewpoint

are bond financed deficits inflationary a ricardian analysis this paper considers the possible theoretical validity of the following monetarist hypothesis that a constant positive government budget deficit can be maintained permanently and without inflation if it is financed by the issue of bonds rather than money the question is studied in a discrete time perfect foresight version of the competitive equilibrium model of sidrauski modified by the inclusion of government bonds as a third asset it is shown that the monetarist hypothesis is invalid if the deficit is defined exclusive of interest payments but that it is valid under the conventional definition it is also shown that the stock of bonds can grow indefinitely at a rate in excess of the rate of output growth provided that the difference is less than the rate of time preference these formal conclusions do not take account of possible limitations on taxing capacity arising from default incentives that tend to grow with the stock of bonds

equilibrium models displaying endogenous fluctuations and chaos abstract this paper surveys current developments in dynamic general equilibrium theory concerned with conditions under which endogenous fluctuations are possible existing contributions are divided into two classes the larger one consists of models with a unique perfect foresight equilibrium while the second includes models where equilibrium is indeterminate and the set of equilibria involving endogenous fluctuations includes sunspots equilibria while the two classes of models involve oscillations of different natures and with different policy implications we show that both are consistent with optimizing behavior and competitive equilibrium

chaos significance mechanism and economic applications imagine a bargaining model say involving diplomats negotiating tariff levels or a disarmament treaty in which each party has been instructed by higher headquarters to respond to each new offer by her opposite number with a counteroffer that is to be calculated from a simple reaction function provided in advance both negotiating parties are prohibited from revealing their own reaction functions to the other if the perfectly deterministic sequence of offers and counteroffers that must emerge from these simple rules were to begin to oscillate wildly and apparently at random the negotiations could easily break down as each party not understanding the source of the problem came to suspect the other side of duplicity and sabotage yet all that may be involved as we will see is the phenomenon referred to as chaos a case that is emphatically not pathological but in which a dynamic mechanism that is very simple and deterministic yields a time path so complicated that it will pass most standard tests of randomness chaos has become a subject of great interest to specialists and nonspecialists alike besides economics it has entered the literature of geometry physics ecology and meteorology it has been written about at length in the new york times magazine and scientific american as well as technical publications this article seeks to describe what it is how it works and what it means for economics

a resource based perspective on corporate environmental performance and profitability drawing on the resource based view of the firm we posited that environmental performance and economic performance are positively linked and that industry growth moderates the relationship with the returns to environmental performance higher in high growth industries we tested these hypotheses with an analysis of 243 finns over two years using independently developed environmental ratings results indicate that it pays to be green and that this relationship strengthens with industry growth we conclude by highlighting the study s academic and managerial implications making special reference to the social issues in management literature

does equity ownership matter for corporate social responsibility a literature review of theories and recent empirical findings based on the concept of shareholder primacy many scholars have argued that it is more important for businesses to earn profits for their shareholders than to provide benefits to society at large corporate social responsibility csr is often regarded as an investment that comes at the expense of shareholders in contrast research analyzing the connections between the equity ownership structure of a company and its level of csr engagement suggests that csr offers benefits to shareholders that go beyond direct financial returns from investments this study provides a comprehensive review and systematic assessment of theoretical considerations and approaches regarding different forms of equity ownership and their relationships to csr and it discusses the relevant benefits and motivations of shareholders the perceived value of these csr benefits varies among different types of shareholders as they assign unequal values to short term financial or to rather long term csr benefits based on a literature sample of 146 publications this review demonstrates central problems inherent in previous analyses given the ambiguous and partially contradictory findings of prior research this study identifies potential moderating influences that help clarify empirical evidence a contingency approach is suggested in future research as this can help resolve the problem of contradictory empirical findings and theoretical arguments

irregular growth cycles this paper uses the familiar neoclassical theory of capital accumulation to show how complex behavior can emerge from quite simple economic structures indeed when sufficient nonlinearities and a production lag are present the interaction alone of the propensity to save and the productivity of capital can lead to growth cycles that exhibit a wandering sawtooth pattern not unlike those observed in reality these fluctuations need not converge to a cycle of any regular periodicity so they are not quasi periodic because such chaotic trajectories are unstable errors of estimation in parameters or initial conditions however tiny will accumulate rapidly into substantial errors of forecast moreover periods of erratic cycling can be interspersed with periods of more or less stable growth evidently the future behavior of a model solution cannot be anticipated from its patterns in the past a situation that seems to mimic experience apparent structural change and unpredictability is explained in the present theory by a deterministic single equation model random shocks play no role so the reader can visualize just what it is we are are talking about a noteworthy simulation is presented in figure 1 for gnp in a growth model that is described below in section iii a period of relatively rapid growth is followed by a period of cycles then remarkably for a considerable time about twenty periods apparently steady state growth occurs wandering cycles however emerge another brief period close to the steady state appears again toward the end of the series i establish conditions of savings and productivity that lead to results of this kind this analysis makes use of the mathematical theory of chaos which in the form exploited here originated in the work of edward lorenz a formal definition of chaos and sufficient conditions for chaotic trajectories were provided in a seminal paper by t y li and james yorke a survey of these related contributions is found in yorke and evelyn yorke this theory was introduced into economics by jess benhabib and myself 1981 where we showed that sequences of rational choices can be erratic when preferences depend on experience in a certain way by michael stutzer who provides a detailed analysis of trygve haavelmo s growth model by benhabib and myself 1980 in an application of the overlapping generations model and in my forthcoming study of the classical growth model

distributional impacts of investment subsidies for residential energy technologies abstract this study analyses the distributional impacts of investment subsidies paid to households that install residential energy technologies based on renewable energy sources the subsidies covering a significant part of the total investment play a considerable role in households energy decisions depending on their design support measures may provide the most benefits to certain groups of society and thus may cause increasing inequality the potential distributional impacts of the investment subsidies are determined by the combination of technologies targeted and their costs household income support intensity subsidy design restrictions and the availability of additional measures this study examines the support system for residential renewable energy technologies in the lithuanian case by employing a microsimulation model this analysis of existing measures provides more general results and highlights the policy features that cause distributional impacts therefore the results are applicable in other countries as well the analysis shows that although the support is efficient from an energy point of view it provides the most benefits to households with higher income and thus increases inequality moreover the subsidies fail to reduce energy poverty due to the poorest households low capacity to invest to obtain a flatter distribution of benefits the design of support measures should consider the current situation of lower income households and affordability issues

the role of monetary policy in eliminating nonconvergent dynamic paths this paper investigates the effects of money growth on nonconvergent dynamic paths in a money in utility model when relative risk aversion is decreasing in money period two cycle and sunspot equilibria are always associated with a high rate of money supply growth however when relative risk aversion is increasing in money it is ambiguous whether they are associated with either high or low rate of money supply growth the paper also investigates the same problem in a transaction cost model the author shows that the results essentially depend on the form of the transaction cost function copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

does the influence of institutional investors depend on the institutional framework an international analysis this article analyses the effect of institutional ownership in alleviating or exacerbating the conflicts of interests among stakeholders in different legal and institutional frameworks this analysis is carried out based on two characteristics the concentration of power of institutional ownership and the identification of the main types of institutional investors in common law countries consistent with the convergence and entrenchment hypotheses we find a u shape relation between ownership structure and firm performance in civil law countries consistent with the collusion and contest theories we find an inverted u shape relation we also find that when institutional investors are classified as pressure resistant and pressure sensitive according to the strength of their ties with managers pressure resistant investors who operate more independently are the most capable of improving the value of the firm

environmental respect ethics or simply business a study in the small and medium enterprise sme context in recent years there have been ever growing concerns regarding environmental decline causing some companies to focus on the implementation of environmentally friendly supply production and distribution systems such concern may stem either from the set of beliefs and values of the company s management or from certain pressure exerted by the market consumers and institutions in the belief that an environmentally respectful management policy will contribute to the transmission of a positive image of the company and its products sometimes however ethics and market rules are not enough to deal with this situation and specific laws must be considered this is the case when companies base their activity on the ethics of self interest concentrating their efforts on projecting an adequate image e g environmental respect rather than fundamentally behaving in environmentally respectful ways this article taking as reference the sme context discusses the reasons for implementing environmentally friendly systems both ethics and business seem to be relevant and therefore a certain balance between market and interventionism seems to be necessary

what good does doing good do the effect of bond rating analysts corporate bias on investor reactions to changes in social responsibility in this study we explore how investors reconcile information on firms social responsibility with analysts assessments of future firm risk in the pricing of long term bonds we ask whether investors pay attention to small strides toward and or small slips away from socially responsible behavior arguing that analysts corporate bias toward gains and against losses influences investor reactions to corporate social responsibility we hypothesize that analysts notice and reward improvements in social responsibility yet excuse lapses we find support for this hypothesis using a unique dataset of long term bonds that combines lagged measures of firm level financial and social performance with bond specific data pertaining to risk of default and pricing the empirically robust asymmetry in investor responses to small but often cumulative increases versus decreases in corporate social responsibility reveals an under examined root cause of longer term larger scale distortions in financial market returns regarding corporate social performance our findings elaborate earlier behavioral research on how corporate bias influences analysts short term assessments of economic risk by theorizing why this corporate bias may influence long term assessments of social risk our work also motivates more critical scrutiny of the role analysts play in revising the future risk of today s social action versus inaction

on endogenous competitive business cycles the belief that the long run equilibrium of a competitive monetary economy that does not experience any exogeneous shocks whether originating from the external environment or from policy should be modelled as a state that is stationary or perhaps growing at a constant rate seems to be deeply rooted in the mind of some economists

measuring structural change and energy use decomposition of the us economy from 1997 to 2002 abstract the steadily increasing focus on energy production and consumption has led to growing research attention to patterns of energy use within economies of particular interest has been comparing the driving forces of increasing efficiency and economic structural change input output analysis ioa and decomposition analysis have become critical tools for performing such analyses this study analyzes aggregate energy use in the united states in 1997 and 2002 to discover the causes of changing energy usage and flows results show that rising population and household consumption acted to drive up energy demand but this driving force was offset by considerable structural change within the economy particularly related to a quickly increasing trade deficit in manufacturing goods thus while total energy intensity the ratio of energy use to economic output declined by approximately 12 between 1997 and 2002 changes in the structure of the economy explain this drop more than increased energy efficiency the level of aggregation at which decomposition analyses are run was identified as a crucially sensitive parameter for the determination of structural change and future studies should specifically address the amount of detail necessary to adequately measure changes in economic structure

do suppliers applaud corporate social performance the influence of corporate social performance csp on stakeholders is one of the focal issues in corporate social responsibility csr research using data of listed companies in china this paper examines whether csr behavior in the form of charitable donations garners a positive reaction from suppliers results derived from both level and change model regressions show that superior csp makes it easier for a firm to obtain trade credit from suppliers although the effect is significant only in non state owned enterprises non soes the results are robust to various measures of csp and endogeneity tests the results support the strategic philanthropy view and apply stakeholder theory in supply chain that strategic csr can help firms to attract suppliers and consolidate cooperative relationships with them which in turn benefits the firms in terms of more trade credit financing from suppliers this paper also shows that state owned enterprises and non soes have different csr intentions and use csr to achieve strategic goals in different ways the conclusions drawn from this study provide practical guidance on csr strategy suggesting that csr activities can help a firm in transition economies to enhance its corporate image establish and consolidate the good relationship with suppliers and obtain economic benefits or achieve long term business objectives

fraud in sustainability departments an exploratory study while sustainability is largely associated with do gooders this article discusses whether and how fraud might also be an issue in sustainability departments more specifically transferring the concept of the fraud triangle to sustainability departments i discuss possible pressures incentives opportunities and rationalizations attitudes for sustainability managers to commit fraud based on interviews with sustainability and forensic practitioners my findings suggest that sustainability managers face mounting pressure and have opportunities to manipulate due to an immature control environment whether a presumably morality driven attitude may prevent them from committing and easily rationalizing fraud remains controversial even though cases of fraud happening in sustainability departments are still widely unknown the interview analysis reveals that sustainability fraud is likely to occur at least to some extent and presumably remains undetected the study brings to light the importance of a clear commitment from executives to sustainability to prevent sustainability fraud and demonstrates adverse developments driven by external stakeholders specifically the bonus relevancy of sustainability index scores in particular the study shows a lack of awareness for potential fraud in sustainability departments

endogenous real exchange rate fluctuations in an optimizing open economy model abstract this paper constructs a simple intertemporal model of a small open economy inhabited by forward looking agents in which endogenous fluctuations in the real exchange rate can arise in equilibrium i e fluctuations that are not linked to movements in economic fundamentals the key condition for the main results is the assumption that the marshall lerner condition does not hold i e that the country s exports and imports are inelastic to its real exchange rate it is shown that given that the marshall lerner condition fails there exist periodic equilibria and or stationary sunspot equilibria in the neighborhood of the stationary state

competitive equilibrium cycles recently there has been a surge of interest in endogenous business cycles that arise in competitive laissez faire economies in the context of standard overlapping generations economies conditions for the existence of equilibrium cycles have been given by grandmont 1983 and by benhabib and day 1982 models of the economy with extrinsic uncertainty or sunspots that have been developed by shell 1977 and by cass and shell 1983 see also balasko 1983 can also lead to equilibrium cycles

how can responsible family ownership be sustained across generations a family social capital approach responsible family ownership rfo is a combination of the family s commitment to the family firm s ff s stakeholders in the long term and the explicit behaviour of the family members associated with the firm however families are not individuals but rather a system of relationships among family members in such a context misunderstandings in communication anachronistic mentalities and different value systems can block the intergenerational transmission of rfo consequently the responsibility of the family towards the ff s stakeholders may be damaged and the firm s socially responsible behaviour hindered this paper aims to identify how rfo is transferred across generations and to ascertain the role that family social capital fsc plays in preserving the transmission of rfo from generation to generation our research is based on three in depth case studies of mexican family owned small and medium sized enterprises first the paper identifies and contrasts a set of fsc specific factors and problems which play a relevant role in the transmission of rfo while recognizing the influence of the mutually reinforcing dynamics of fsc dimensions secondly the family s honourableness a lander in j bus ethics 116 4 751 767 2013 is identified as a key driver for sustaining the transmission of rfo finally the paper identifies rfo institutionalization required to face the intrinsic problems of transmitting rfo in growing families

an empirical examination of debt covenant restrictions and accounting related debt proxies abstract prior studies of discretionary accounting choices have generally relied on one or more proxy variables to measure closeness to debt covenant restrictions without actually examining the existence or extent of restrictive covenants this study tests the validity of the most commonly used proxy the debt equity ratio by examining its relation to actual debt covenant restrictions for a random sample of u s firms the results indicate that several versions of the debt equity ratio capture the existence and tightness of retained earnings restrictionsand the existence of net tangible asset and working capital restrictions but are unrelated to four other covenant restrictions

do energy efficiency investments deliver evidence from the weatherization assistance program a growing number of policies and programs aim to increase investment in energy efficiency because conventional wisdom suggests that people fail to take up these investments even though they have positive private returns and generate environmental benefits many explanations for this energy efficiency gap have been put forward but there has been surprisingly little field testing of whether the conventional wisdom is correct this article reports on the results of an experimental evaluation of the nation s largest residential energy efficiency program the weatherization assistance program conducted on a sample of approximately 30 000 households in michigan the findings suggest that the upfront investment costs are about twice the actual energy savings furthermore the model projected savings are more than three times the actual savings although this might be attributed to the rebound effect when demand for energy end uses increases as a result of greater efficiency the article fails to find evidence of significantly higher indoor temperatures at weatherized homes even when accounting for the broader societal benefits derived from emissions reductions the costs still substantially outweigh the benefits the average rate of return is approximately 7 8 annually

tagging and targeting of energy efficiency subsidies corrective taxation is a common approach to addressing externalities internalities and other market distortions these distortions are often heterogeneous for example some cars pollute more than others and many people consume alcohol rationally even as present biased individuals might over consume such heterogeneity raises the question of whether a corrective tax is well targeted does it primarily affect individuals subject to relatively large distortions a tax set at the average level of the distortion could actually reduce welfare if the marginal individuals were already making relatively undistorted decisions this paper studies the targeting of corrective subsidies for energy ef cient durable goods such as air conditioners insulation and cars these subsidies are justi ed by multiple distortions primarily including environmental externalities credit constraints landlord tenant information asymmetries imperfect information and behavioral biases such as inattention to energy costs allcott and greenstone 2012 gillingham newell and palmer 2009 we rst argue that these distortions are heterogeneous on observables wealthy people are less credit constrained homeowners are unaffected by the landlord tenant problem and we show empirically that environmentalists are more attentive to energy costs and believe that energy ef cient goods save more money we then show that

chaotic dynamics in a cash in advance economy abstract this paper introduces sufficient conditions for the existence of deterministic cycles and chaos in cash in advance models building on the earlier work of woodford 1994 chaotic equilibria are shown to be particularly likely in the cash in advance model because of a unique characteristic of such models a discontinuous derivative in the difference equation map at the satiation level of real balances the existence of a kink means that chaotic equilibria may exist without implausibly large curvatures in the utility function since a chaotic time series that makes use of the kink would sometimes exhibit zero nominal interest rates the paper also gives an example of chaos in which nominal interest rates remain strictly positive

the maturing of socially responsible investment a review of the developing link with corporate social responsibility this paper reviews the development of socially responsible investment sri over recent years and highlights the prospects for an increasingly strong connection with the practice of corporate social responsibility the paper argues that not only has sri grown significantly it has also matured in particular it has become an investment philosophy adopted by a growing proportion of large investment institutions this shift in sri from margin to mainstream and the position in which institutional investors find themselves is leading to a new form of sri shareholder pressure although this bears some resemblance to lobbying campaigns which might take advantage of shareholder rights we seek to distinguish it as an important phenomenon in its own right one to which corporate executives are likely to be paying increasing attention in the years to come we further argue that this approach potentially meets some of the earlier ethical criticisms of certain forms of sri but ironically probably owes its existence to those pioneering approaches we conclude with some suggestions for further research to inform discussion of the issues highlighted in the paper

sunspot equilibria rational bubbles in a model of money in the utility function abstract sunspot equilibria are constructed in brock s 1975 model of money in the utility function serial correlations of real balances and the nominal interest rate in these equilibria can be either positive or negative the example here suggests that local sunspots are more likely to exist when the agent s discount rate is small and that serial correlations in local sunspots when they exist are inversely related to the rate of money growth it is also shown that stationary sunspots may exist even when equilibrium cycles do not

the emergence of equilibrium cycles in a monetary economy with a separable utility function abstract this paper analyzes the dynamic properties of the monetary economy when money held during the period induces some utility it is shown that the price level and real money balances may have chaotic dynamic paths even if the utility function is separable in real money balances and consumption a crucial point is that a constraint on the utility of money yields the wealth effect that inflation will reduce the real value of assets hence as in the overlapping generations model the conflict between substitution and wealth effects may cause globally stable periodic orbits as well as the complicated dynamics

moral and conceptual issues in investment and finance an overview as director of the second east carolina university conference in applied philosophy it is my pleasure to introduce this fine collection of papers on moral and conceptual issues in investment and finance the essays address a wide range of topics south african disinvestment the professional responsibil ities of accountants decision theoretic problems for fiduciaries and the rights of employees in corporate takeovers to cite just a few examples consequently any attempt to somehow summarize or tie together all this material would be either extremely super ficial or far exceed the available space instead in what follows i try to supplement the papers first by offering some general observations about our con ference topic and secondly by identifying what seem to me to be some of the fertile areas for further research the title of our conference was meant to em phasize two points first although a number of philosophers and business scholars now study a field commonly called business ethics a more natural and general description of their interests might be philosophical issues in business the study of the particularly abstract foundational or normative aspects of business thus while topics such as the rights of employees or the social obligations of corporations are of course part of the philosophical study of business so are non normative or less explicitly normative questions such as whether and in what sense corporations are persons the extent to

small business owner managers perceptions of business ethics and csr related concepts recent academic articles point to an increased vagueness and overlap in concepts related to business ethics and corporate responsibility further the perception of these notions can differ in the small business world from the original academic definitions this article focuses on the cognition of small business owner managers given the impact of small business owner managers on their ventures corporate responsibility and ethical issues can take a different route in smes the small business owner manager is able to shape the corporate culture and to enact values other than profit adopting a cognitive perspective we have identified how the small business owner manager makes sense of notions linked to corporate social responsibility csr and business ethics the concept of sensemaking has recently been applied to csr basu and pallazzo 2008 cramer et al 2006 applying a cognitive perspective to small business owners may help in explaining specific phenomena found within small business ownership for this research the repertory grid technique rgt is used a method that has not previously been widely applied in the business and society field

time and frequency connectedness among oil shocks electricity and clean energy markets abstract this paper examines the time and frequency connectedness among electricity carbon and clean energy markets and oil price demand and supply shocks in doing so we use the spillover method proposed by diebold and yilmaz 2012 and its extension in the frequency domain by barunik and k ehlik 2018 we find increased connectedness during the global financial crisis as well as in the shale oil revolution period the total connectedness is also higher in the short run compared to the long run due to their low connectedness electricity futures can act as a risk diversifier and safe haven asset against oil shocks net pairwise directional connectedness among oil shocks and the clean energy index is higher during the shale oil revolution these results have important implications for investors with different investment time horizons

morals or economics institutional investor preferences for corporate social responsibility this article presents the results of a study that analysed whether social responsibility had any bearing on the decision making of institutional investors being that institutional investors prefer socially aligned organizations this study explored to what extent the corporate actions and or social environmental investments influenced their decisions our results suggest that there are specific variables that affect the perceived value of the organization leading to decisions to not only invest but whether to hold or sell the shares and therefore having a consequential impact on the capital market s valuation

cost effectiveness of renewable electricity policies we analyze policies to promote renewable sources of electricity a portfolio standard rps raises electricity prices and primarily reduces gas fired generation a knee of the cost curve exists between 15 and 20 goals for 2020 in our central case and higher natural gas prices lower the cost of greater reliance on renewables a renewable energy production tax credit lowers electricity price at the expense of taxpayers which limits its effectiveness in reducing carbon emissions and it is less cost effective at increasing renewables than a portfolio standard neither policy is as cost effective as a cap and trade policy for achieving carbon emission reductions

u s federal government subsidies for clean energy design choices and implications abstract subsidies for clean energy deployment have become a major component of u s federal energy and climate policy after a surge in spending under the american recovery and reinvestment act of 2009 they are an even larger component but now face increased scrutiny given their lasting presence how does one design these subsidies to be as cost effective as possible surprisingly the conceptual framework and empirical evidence available to help policymakers identify which subsidies generate the most bang for the buck are limited to help answer this question we begin with an overview of the justifications for and the arguments against subsidizing clean energy technologies next we briefly describe major subsidies finally we summarize key design choices suggesting an increased focus on upfront cash payments for physical outcomes such as capacity this contrasts with the considerable focus on tax credits loan guarantees production and cost based subsidies which have been more prominent to date

deconstructing the energy efficiency gap conceptual frameworks and evidence abstract energy efficient technologies offer considerable promise for reducing the financial costs and environmental damages associated with energy use but these technologies appear not to be adopted to the degree that appears justified even on a purely private basis we present two complementary frameworks for understanding this so called energy paradox or energy efficiency gap first we build upon previous literature by dividing potential explanations for the energy efficiency gap into three categories market failures behavioral anomalies and model and measurement errors second we examine the elements of cost minimizing energy efficiency decisions the typical benchmark used in assessing the gap s magnitude

investing in socially responsible companies is a must for public pension funds because there is no better alternative with assets of over us 1 0 trillion and growing public pension funds in the united states have become a major force in the private sector through their holding of equity positions in large publicly traded corporations more recently these funds have been expanding their investment strategy by considering a corporation s long term risks on issues such as environmental protection sustainability and good corporate citizenship and how these factors impact a company s long term performance conventional wisdom argues that the fiduciary responsibility of the pension funds trustees must be solely focused on their beneficiaries and therefore their investment criteria must be based strictly on narrowly defined financial measures it is also asserted that well established financial measurements of corporate performance already include long term risk assessment through discounted present value of future flow of earnings consequently all other criteria are contrary to the best interest of the pension funds beneficiaries in this paper we assert that contrary to conventional wisdom pension funds and for that matter other mutual funds must be concerned with the long term survival and growth of corporations these measures are generally referred to socially responsible investing sri and when applied to corporations it is termed socially responsible corporate conduct srcc we demonstrate that current measurement of future risk assessment invariably understates and quite often completely overlooks these long term risks because of the inherent bias towards short run on the part of financial intermediaries whose compensation depends greatly on short term results furthermore there is ample evidence to suggest that these intermediaries have been engaging in self serving practices and thus failing in their duties to serve their clients i e pension funds best interests because of their large holdings in the total market as well as individual companies these funds cannot easily divest from poorly performing companies without destabilizing the companies stock and overall markets hence they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long term aspects of their operations in terms of their impact on environment sustainability and community welfare to name a few we argue that an exclusionary and even a primary focus on short term financial criteria is no longer a viable option it also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance thus socially responsible investing practices are not merely discretionary and desirable activities they are a necessary imperative which both the corporations and public pension funds and other large institutional holders will ignore at serious peril to themselves finally the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities it also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long term corporate survival and growth in the context of a changing economic environmental and socio political dynamic

firms corporate social responsibility behavior an integration of institutional and profit maximization approaches understanding firms behavior across countries a key concern in the international business literature requires the joint consideration of both institutional influences and firms profit maximization goals in the corporate social responsibility csr area however researchers have utilized theories that take into account only one or the other institutional theory which explains csr as legitimacy seeking activities in line with national level institutions or economic based approaches that consider csr effects only in terms of firm profitability while an institutional argument implies convergence in csr behavior among firms in similar institutional contexts profit maximization logic treats csr as a firm specific behavior we integrate these perspectives by demonstrating the moderating effects of firms economic motivations for seeking legitimacy on the relationship between institutional environment and csr responsiveness we argue that variations in firms economic visibility and economic vulnerability can bring about differences in their need for societal goodwill and in turn their legitimacy seeking findings on a database of apparel firms employee related csr across 23 countries support this overall argument the integration of such fundamentally different theoretical perspectives allows us to contribute new theoretical insights to international business on the influence of national institutions on firms behavior

the corporation and profits in this paper i argue that a theory of the firm that takes profit maximizing to be the essential activity and purpose of the firm is seriously inadequate i argue that firms in the actual economy neither are nor should be maximizers of profit i argue instead that firms are and must be satisficers that they must make enough profit to satisfy the various demands which they encounter in their operation yet it should be clear that the notion of satisficing while it escapes the major problems encountered by maximization itself lacks much of any very clear content in the end i claim that the notion of satisficing can best be understood if we abandon the traditional characterization of profits and replace it with a notion of extended profits which i define as that part of corporate revenue which is available for distribution among stockholders management and labor and for reinvestment in the corporation s business operation

a liquidity in advance model of the demand for money under price uncertainty abstract we develop a model of money demand in which the asset and goods markets open sequentially money balances are subject to price level and consumption risk empirical evidence from a bivariate arch framework suggests both sources of risk reduced money demand in the 1970s inflation risk depresses money demand throughout our sample 1962 1987 the econometric analysis resolves conflicting empirical estimates reported in the literature

corporate social responsibility in the banking industry motives and financial performance abstract the current study investigates the association between corporate social responsibility csr and financial performance fp and discusses the driving motives of banks to engage in csr three motives namely strategic choices altruism and greenwashing suggest that the relationship between csr and fp is positive non negative and non existent respectively we obtained our sample which covered 2003 2009 from the ethical investment research service eiris databank and bankscope database the data consists of 162 banks in 22 countries we then classified the banks into four types based on their degree of engagement in csr this study proposes the use of an extended version of the heckman two step regression in which the first step adopts a multinomial logit model and the second step estimates the performance equation with the inverse mills ratio generated by the first step the empirical results show that csr positively associates with fp in terms of return on assets return on equity net interest income and non interest income in contrast csr negatively associates with non performing loans hence strategic choice is the primary motive of banks to engage in csr

institutional interest ownership type and environmental capital expenditures evidence from the most polluting chinese listed firms this study empirically examines whether firms environmental capital expenditures impact institutional investors investment decisions in the chinese market we particularly examine the impact of ownership type on the relationship of environmental capital expenditures and the behavior of different types of institutional investors by classifying institutional investors into two categories short term and long term investors in addition this study further investigates whether environmental capital expenditures related to ownership type increase firm value we find that long term institutional investors tend to invest in state owned firms soes making environmental capital expenditures results also indicate that with governmental backing and encouragement the market value of soes making more environmental capital expenditures is likely to increase however no similar results are found for non soes

the structure of ownership and the theory of the firm the separation of ownership from control produces a condition where the interests of owner and of ultimate manager may and often do diverge and where many of the checks which formerly operated to limit the use of power disappear in creating these new relationships the quasi public corporation may fairly be said to work a revolution it has divided ownership into nominal ownership and the power formerly joined to it thereby the corporation has changed the nature of profit seeking enterprise 1

how does the market value corporate sustainability performance this study provides empirical evidence on how corporate sustainability performance csp as proxied by membership of the dow jones sustainability index is reflected in the market value of equity using a theoretical framework combining institutional perspectives stakeholder theory and resource based perspectives we develop a set of hypotheses that relate the market value of equity to csp for a sample of north american firms our preliminary results show that csp has significant explanatory power for stock prices over the traditional summary accounting measures such as earnings and book value of equity however further analyses suggest that we should not focus on corporate sustainability itself our findings suggest that what investors really do is to penalize large profitable firms with low level of csp firms with incentives to develop a high level of csp not engaging on such strategy are thus penalized by the market

sources of complex dynamics in two sector growth models this paper develops a tractable multisectoral dynamic equilibrium model and provides a fairly complete analysis of the dynamics that may arise along the intertemporal competitive equilibrium path despite the fact that the environment displays neither random nor deterministic variability the model may produce oscillations in aggregate variables such as output consumption and investment we show that these oscillations can be exactly periodic of any finite period i and even totally aperiodic chaotic we characterize the parameter values for which each of these cases occur but also provide some strong global asymptotic stability results

the effects of fiscal stimulus evidence from the 2009 cash for clunkers program we evaluate the impact of the 2009 cash for clunkers program on short and medium run auto purchases our empirical strategy exploits variation across u s cities in ex ante exposure to the program as measured by the number of clunkers in the city as of summer 2008 we find that the program induced the purchase of an additional 370 000 cars in july and august 2009 however we find strong evidence of reversal high clunker counties bought fewer autos in the 10 months after the program expired which offset most of the initial purchases we find no evidence of an effect on employment house prices or household default rates in cities with higher exposure to the program jel codes h20 e62 copyright 2012 oxford university press

the energy efficiency gap what does it mean abstract as renewed attention has been given by policy makers to energy conservation issues it has frequently been asserted that an energy efficiency gap exists between actual and optimal energy use the critical questions is how to define the optimal level of energy efficiency this paper seeks to disentangle some confusing strands of argument that are frequently brought to bear on this question by identifying the major conceptual issues that determine the set of feasible answers we identify five separate and distinct notions of optimality the economists economic potential the technologists economic potential hypothetical potential the narrow social optimum and the true social optimum each of these has associated with it a corresponding definition of the energy efficiency gap our analysis demonstrates that necessary preconditions for identifying the right measure of the energy efficiency gap include understanding and disentangling market failure and non market failure explanations for the gradual diffusion of energy efficient technologies

corporate social responsibility and different stages of economic development singapore turkey and ethiopia the u s and u k models of corporate social responsibility csr are relatively well defined as the phenomenon of csr establishes itself more globally the question arises as to the nature of csr in other countries is a universal model of csr applicable across countries or is csr specific to country context this article uses integrative social contracts theory isct and four institutional factors firm ownership structure corporate governance openness of the economy to international investment and the role of civil society to examine csr in singapore turkey and ethiopia field research results illustrate variation across the institutional factors and suggest that csr is responsive to country differences research findings have implications for consideration of the tradeoff between global and local csr priorities and practices

endogenous price fluctuations in an optimizing model of a monetary economy this paper demonstrates that an optimizing model of a monetary economy can produce perfect foresight equilibria in which the price level fluctuates forever cyclically or chaotically fluctuating equilibria are more likely to exist when the rate of money supply growth is high furthermore the set of equilibrium prices may have a complicated topological structure which poses a more serious problem concerning the validity of comparative statics method than any sort of indeterminacy previously discussed in the literature copyright 1991 by the econometric society

assessing the u s oil security premium abstract world oil supply disruptions lead to u s economic losses increased oil consumption increases the vulnerability of the economy to oil supply disruptions but it matters where the additional oil is produced increased production from stable producers can dampen future oil price shocks whereas increased production from unstable producers can exacerbate future oil price shocks because oil is fungible u s pricing and import policies can differentiate only between domestic and imported oil rather than between stable and unstable sources the economic losses associated with oil supply disruptions gdp losses and some transfers abroad are externalities that can be quantified as oil security premiums we estimate these premiums by taking into account projected world oil market conditions probable oil supply disruptions the market response to oil supply disruptions and the resulting u s economic losses

the corporate social performance financial performance link strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management rather than traditional arenas of strategic management using a greatly improved source of data on corporate social performance this paper reports the results of a rigorous study of the empirical linkages between financial and social performance corporate social performance csp is found to be positively associated with prior financial performance supporting the theory that slack resource availability and csp are positively related csp is also found to be positively associated with future financial performance supporting the theory that good management and csp are positively related 1997 by john wiley sons ltd