Measure the Performance with the Market Value Added: Evidence from CSR Companies

An increasing number of firms in OECD countries are obtaining certification as Socially Responsible. Literature is sensitive in testing whether there is a relation between firm performance and Social Responsibility certification. In order to overcome problems related to the multiplicity of Corporate Social Responsibility (CSR) definitions and certifications, our work implements a CSR index based on the intersection between two of the three main international indices (Domini 400 Social Index, Dow Jones Sustainability World Index and FTSE4Good Index). By using this database in a panel framework, our work shows that among Corporate Performance Measures (CPF), Market Value Added (MVA) is affected by a firm’s social responsible behaviour and certification. The results support the idea that CSR firms have better long-run performance. Thanks to the reputation effect, they achieve higher sales volumes and profits and a reduction in long-run costs: these effects compensate the costs due to the certification.