An Empirical Analysis of Corporate Social Responsibility Effects on Financial Performance for Romanian Listed Companies

The focus on corporate social responsibility (CSR) becomes central all over the world, being influenced by various factors, such as economic and employment crisis, fiscal issues, increasing competition, but also the interaction of environmental and social components with the economic performance. Moreover, the occurrence of new trends in circular and bio-economy lead to a social responsible behaviour of the companies, in spite of the downsize in terms of short-term performance. As such, this study assesses the interaction between social performance, as shaped by CSR measures, and companies’ economic and financial performance. In order to assess the social performance, we define a CSR index and for financial performance, we use various accounting and market indicators. The analysis used data for 61 companies listed on Bucharest Stock Exchange for 2015-2017 timeframe, and the analysis was conducted using panel data regressions. We believe that the obtained results are explained by the companies’ focus, especially the ones with solid financial status, on the implementation of measures that are associated with bio-economy, targeting a reduced environmental impact, and with social programs and activities. This research also emphasizes some issues for the listed companies on the Bucharest Stock Exchange, but also for other stakeholders.