Corporate Financial Performance and Corporate Social Performance: methodological development and the theoretical contribution of empirical studies

Abstract

One of the roles of accounting is to provide information on business performance, either through financial accounting indicators or otherwise. Theoretical-empirical studies on the relationship between Corporate Financial Performance (CFP) and Corporate Social Performance (CSP) have increased in recent years, indicating the development of this research field. However, the contribution to the theory by empirical studies is made in an incremental manner, given that each study normally focuses on a particular aspect of the theory. Therefore, it is periodically necessary to conduct an analysis to evaluate how the aggregation of empirical studies has contributed to the evolution of the theory. Designing such an analysis was the objective of the present study. The theoretical framework covered the following: stakeholder theory, the relationship between CSP and CFP, good management theory, and slack resource theory. This research covered a 15-year period (1996 to 2010), and the data collection employed a search tool for the following databases: Ebsco, Proquest, and ISI. The sampling process obtained a set of 58 exclusively theoretical-empirical and quantitative articles that test the CSP-CFP relationship. The main results in the theoretical field reinforce the proposed positive relationship between CSP and CFP and good management theory and demonstrate a deficiency in the explanation of the temporal lag in the causal relationship between CSP and CFP as well as deficiencies in the description of the CSP construct. These results suggest future studies to research the temporal lag in the causal relationship between CSP and CFP and the possible reasons that the positive association between CSP and CFP has not been assumed in some empirical studies.