Analysis of the return on the social and environmental investments of brazilian companies

• Autor(a) principal: Orellano, Verônica Ines Fernandez
• Data de Publicação: 2011
• Outros Autores: Quiota, Silvia
• Tipo de documento: Artigo
• Idioma: por
• Título da fonte: Revista de Administração de Empresas
• Texto Completo: https://periodicos.fgv.br/rae/article/view/30923
• topic: Social/environmental responsibility; financial performance; social/environmental performance; endogeneity; panel data; Responsabilidad socioambiental; desempeño financiero; desempeño socioambiental; endogeneidad; datos de panel; Responsabilidade socioambiental; desempenho financeiro; desempenho socioambiental; endogeneidade; dados de painel

This paper investigates the correlation between firm’s financial and social/environmental performance for Brazilian companies from 2001 to 2007; based on two types of panel data econometric models; which aim to analyze correlation and causality. The fixed effects model was used to estimate correlation; while a panel data IV model was used to investigate causality. The results how a positive correlation between corporate social/environmental and financial performance; mainly in the case of internal social investment; which is strongly positively correlated with the variable return on assets (ROA). The causality analysis also showed that the internal social investment has a positive and significant effect on ROA. This result is in accordance with those obtained by Laan et al (2008); which indicate that disregarding the wishes of the primary stakeholders (employees; consumers and investors) contributes negatively to performance measures.