Investigating the impact of CSR on Firm Performance: Evidence from European Retailers

Detta är en C-uppsats från Handelshögskolan i Stockholm/Institutionen för marknadsföring och strategi

Sammanfattning: Research has documented the impact of CSR in various industrial domains. When discussing the impact of CSR, scholars suggest various forms such as negative, positive and in some instances, CSR is portrayed to have a neutral impact on firm performance. As such, CSR impact across different industrial sectors becomes a complex phenomenon and is still inconclusive in prior literature. Moreover, there is little consensus on the impact of CSR within the retail sector. The purpose of this thesis is to investigate how retailers' CSR efforts measured by ESG score impact firm performance, measured as Return on Assets and Return on Equity. The study aims to address this gap in current literature. We employ panel data (2015- 2020) retrieved from the Thomson Reuters Eikon database. Our data consist of 118 retailers from 14 countries across Europe. Using fixed-effects regressions to test our hypotheses, the results suggest that the relationship between ESG score and financial performance is negative, indicating that firms with best-rated CSR efforts tend to yield weaker financial performance. Additionally, we find that there are geographical differences in CSR performance. Our results show that Nordic retailers have lower ESG scores, in other words, weaker CSR performance, than retailers from the rest of Europe. The main contribution realized from our results is to complement prior debate on the emerging scholarship of results that aim to understand the impact of CSR within other industrial domains, as negative, neutral or positive. Our thesis ends by offering up a polemic to the manager's use of the term "sustainability" in comparison to "circularity".

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