The moderating effect of the CSR committee on the relationship between CSR performance and financial performance: empirical evidence from European firms

Abstract

The present work is aimed to address the subject of CSR practice impact on corporate financial performance (measured via ROE), along with each of the CSR dimensions (social and environmental) respective effect, examined through the moderating effect of CSR committee, regarding a sample involving 473 European companies, observed over the time period ranging from 2015 to 2021. To test the moderating effect of the CSR committee and its respective characteristics on the relationship between CSR performance and financial performance of companies involving a CSR committee, we considered applying a panel-data based linear regression, administered through implementation of the Thomson Reuters ASSET4 database. Our findings show that CSR practices have a sustained positive and significant impact on the financial performance of companies. However, when examining the moderating effect, certain characteristics appear to be considered key factors for the proper functioning of the CSR committee, thereby improving the firm’s financial performance. The findings of this study provide multiple contributions for policymakers to improve the valuation of companies and strengthen the mechanisms for ensuring the financial performance of companies and their sustainability.

Keywords:

• CSR practice
• CSR committee
• Financial performance

Additional information

Notes on contributors

Houda Dziri

Houda Dziri holds is a Doctor in Finance. Her main research interests are related to corporate finance, behavioral finance business, corporate governance and Business Ethics as well.

Anis Jarboui

Anis Jarboui is full professor in Business Administration at the university of Sfax. He holds a Ph.D. in finance from University of Nice Sophia Antipolis-France (Université côte d'Azur 2004) and a HDR degree (Habilitation for supervising doctoral research) in 2008. He was dean (college of business administration) of the higher institute of business administration of Sfax, from 2011 to 2017. He has published more than 100 articles in peer-reviewed/indexed journals and conferences. He has written a number of book chapters.