Purpose

Causality between corporate financial performance (CFP) and corporate social performance (CSP) has been extensively debated in previous research works; however, little research has been done to investigate the long-run dynamics between these two constructs. The purpose of this paper is to enrich the CFP–CSP literature by estimating the long-run equilibrium relationship between financial performance and social performance in the banking sector in the Gulf Cooperation Council countries over the period 2009–2019.

Design/methodology/approach

The paper adopts an approach that is primarily used in financial economics: first, the authors perform panel long-run Granger causality following Canning and Pedroni’s procedure to indicate the direction of the causal relationship. Second, the authors estimate an error correction model using Chudik and Pesaran’s (2015) dynamic common correlated effects mean group estimator to determine the sign of the relationship.

Findings

The present research findings prove the existence of a long-run equilibrium relationship between CFP and CSP, while indicating at the same time that panel Granger causality runs positively from CSP to CFP, which means that changes in CSP produce lasting changes in CFP.

Practical implications

The findings of the paper would guide strategists to build fit for purpose corporate social responsibility (CSR) strategies in their firms and establish a continuous investment in CSR activities in the long run rather than harshly investing in CSR activities in the short run.

Originality/value

To the best of the authors’ knowledge, this paper is the first one to address heterogeneity in long-run Granger causality tests to estimate the relationship between CSP and CFP.

中文翻译：

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GCC 银行业中 CFP 和 CSP 之间的长期动态：估计允许横截面依赖性的非平稳异构面板

目的

企业财务绩效（CFP）和企业社会绩效（CSP）之间的因果关系在之前的研究工作中已经被广泛讨论过；然而，很少有研究来调查这两种结构之间的长期动态。本文的目的是通过估计 2009-2019 年海湾合作委员会国家银行业金融绩效与社会绩效之间的长期均衡关系来丰富 CFP-CSP 文献。

设计/方法/方法

本文采用了一种主要用于金融经济学的方法：首先，作者按照 Canning 和 Pedroni 的程序进行面板长期格兰杰因果关系，以指示因果关系的方向。其次，作者使用 Chudik 和 Pesaran (2015) 的动态共同相关效应均值组估计量来估计误差校正模型，以确定关系的符号。

发现

目前的研究结果证明了 CFP 和 CSP 之间存在长期均衡关系，同时表明面板 Granger 因果关系在 CSP 和 CFP 之间呈正向运行，这意味着 CSP 的变化会产生 CFP 的持久变化。

实际影响

该论文的研究结果将指导战略家在其公司中建立符合目的的企业社会责任 (CSR) 战略，并在长期内对 CSR 活动进行持续投资，而不是在短期内对 CSR 活动进行严厉投资。

原创性/价值

据作者所知，本文是第一篇在长期格兰杰因果检验中解决异质性以估计 CSP 和 CFP 之间关系的论文。