TITLE:
The Virtuous Circle of Corporate Social Performance and Corporate Social Disclosure
AUTHORS:
Francesco Gangi, Eugenio D’Angelo
KEYWORDS:
Corporate Social Responsibility, Corporate Social Performance, Corporate Social Dis-closure, Socially Responsible Funds
JOURNAL NAME:
Modern Economy,
Vol.7 No.12,
November
8,
2016
ABSTRACT: Previous literature in the field of corporate social
responsibility investigates whether corporate social performance can be seen as
a determinant of corporate social disclosure or, conversely, if corporate
social disclosure is a determinant of corporate social performance. The aim of
this paper is to join these two streams of research in a unique theoretical
model, which can demonstrate that there is a mutual interaction between
performance and disclosure. This can result, in the long run, in a virtuous
circle where higher social performance generates future higher social
disclosure and this determines higher future social performance and so on. An
analytical model has been adopted to demonstrate the research hypothesis.
Gathering data from the portfolios of the European Socially responsible funds
(SRFs) listed on the Morningstar platform in 2010, the study analyzed 160
social reports published by 80 companies during 2008 and 2009. Findings, by
demonstrating the non-one-way relationship between social performance and
social disclosure, confirm the existence of a mutual influence between the
results gained in different CSR areas and the capability to control and
communicate such performance. In this way, the paper provides not only
theoretical insights, but also practical implications for managers that are
required to put in place responsive and effective initiatives towards the
increasing pressure exerted by the internal and external environments in which
they operate.