Abstract
This article examines the impact of corporate social responsibility on the financial performance of firms listed on the London stock exchange (LSE). Using data for 50 firms spanning 2008-2017, our study reports that the environmental performance has positively influenced the stock price of both the product and service-based firms listed on LSE. Similarly, it enhanced the return on capital for product-based firms while reducing them for service-based firms. In contrast, social activities have a significant negative impact on the stock price of the product and service-based listed firms. Likewise, social performance has a significant negative impact on the return on capital of service-based firms listed on LSE. However, we find an insignificant relationship between governance disclosure and the stock price and the return on capital for product and service-based firms. This study has implications for policymakers of stock markets to issue rigid regulations to enforce all listed firms to disclose their environmental activities to stakeholders.
| Original language | English |
|---|---|
| Pages (from-to) | 1370-1383 |
| Number of pages | 14 |
| Journal | Corporate Social Responsibility and Environmental Management |
| Volume | 29 |
| Issue number | 5 |
| Early online date | 1 Apr 2022 |
| DOIs | |
| Publication status | Published - 6 Sept 2022 |
Bibliographical note
This is the peer reviewed version of the following article: Elmghaamez, I & Olarewaju, J 2022, 'Corporate social responsibility and financial performance of product and service-based firms listed on London Stock Exchange', Corporate Social Responsibility and Environmental Management, vol. 29, no. 5, pp. 1370-1383., which has been published in final form at https://doi.org/10.1002/csr.2275. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.This document is the author’s post-print version, incorporating any revisions agreed during the peer-review process. Some differences between the published version and this version may remain and you are advised to consult the published version if you wish to cite from it.
Keywords
- corporate social responsibility
- environmental disclosure
- governance disclosure
- return on capital
- social disclosure
- stock price
