Corporate social responsibility: Social or strategic?

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1 Basu, Debarati

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	Issue Date	Title	Sub-Title	Author(s)	Journal Name	Volume Number	Issue Number	Pages
1	4-Dec-2017	Corporate social responsibility: Social or strategic?	-	Basu, Debarati

There are two competing views on how firm’s decide on CSR. The profit-maximizing view – postulated by Friedman, recognizes CSR as an expense or a drain of a firm’s valuable resources. On the other hand, Freeman’s stakeholder theory asserts that a firm should take into consideration the interests of everyone who can affect or is affected by the welfare of the firm. A large body of literature has explored these competing views on CSR and yet, the evidence remains mixed. An influential meta-analysis of roughly 167 studies, finds that some studies document a positive effect when they regress firms’ financial performance on corporate goodness while others find a negative effect. The average effect across these studies is a small positive increase in firm performance.

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