Ştefan Cristian Gherghina

Department of Finance, Bucharest University of Economic Studies,

Bucharest, Romania,

stefan.gherghina@fin.ase.ro

EXPLORING THE IMPACT OF CORPORATE SOCIAL

RESPONSIBILITY POLICIES ON FIRM VALUE: THE CASE OF LISTED COMPANIES IN ROMANIA

Georgeta Vintilă

Department of Finance, Bucharest University of Economic Studies,

Bucharest, Romania

vintilageorgeta@yahoo.fr

Abstract. Corporate social responsibility (CSR) highlights the reaction to social pressures, respectively the reply to the needs and expectations of stakeholders, concerns towards the environment, and social needs that depict its dimensions. Our paper aims at providing evidence on the links between CSR and firm value on the example of listed companies in Romania. The importance of this research emerges by the goal of strengthening a high level of consumer’s trust in business and the noteworthy impact of companies to societal well-being. Based on a multidimensional CSR policies questionnaire, we developed a global index of CSR, as well as four subindices on social involvement, employees, products and services, environmental protection, both equal-weighted (EW) and stakeholder-weighted (SW). Firm value was proxied by Tobin’s Q ratio adjusted according to activity sector. Based on the EW approach, we found a positive impact of the CSR global index and CSR subindices, with the exception of the CSR subindex related to environmental protection, on firm value. The SW approach reinforces only the positive impact of the CSR global index and CSR subindex on the quality, safety, and effectiveness related to products and services, on firm value. Besides, several CSR aggregate measures are significantly different for listed companies on the first tier and listed companies on the second tier.

Received: December, 2015

1st Revision: January, 2016

Accepted: February, 2016

DOI: 10.14254/2071- 789X.2016/9-1/2

JEL Classification: G32, M14

Keywords: Corporate social responsibility, firm value, multivariate regression models, T-test, Romania.