Causality between corporate social performance and financial performance: The case of selected companies listed in the Philippine Stock Exchange

• Main Authors: Agoncillo, Margo Hannah C., Concepcion, Rubi Amalia M., Malabanan, Cali Jean B., Rufino, Leanne Michaela V.
• Format: text
• Language: English
• Published: Animo Repository 2011
• Subjects: Social responsibility of business > Philippines; Financial institutions > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18400
• Institution: De La Salle University

This paper focuses on the causal relationship of corporate social performance (CSP) and financial performance (FP). CSP, also known as corporate social responsibility (CSR), determines the social feature of a company while FP focuses on the business operations of a company. The main purpose of this study is to find out if there is causal effect between CSP and FP of publicly listed companies in the Philippines from 1995 to 2009 using the Granger causality test. The significance of the study is to show whether compliance with corporate social performance would result to better financial performance or, to know if good financial performance would lead to an improved corporate social performance. CSP measures were obtained using a survey patterned with the Hang Seng index constituent company's survey which is used in CSR-Asia in the Pacific Region. The CSP variable were general CSP, social, environment, governance and aggregate CSP score. FP measures were based on the ROA and ROE of each company which were taken from the Osiris and SEC databases. Control variables of the study were size, risk and industtry. According to the Granger causality approach, the results have shown that there was no causal relationship between CSP and FP in the Philippines.