Abstract
In this study, we develop an approach that integrates corporate image of corporate social responsibility (CSR) activities, stock price crash risk and profitability into a dynamic slack-based measure model to evaluate corporate sustainability performance. We illustrate our methodology by applying it empirically to examine the sustainability performance of firms that won a Top 50 Corporate Citizenship Award from the Commonwealth Magazine of Taiwan. Our proposed model yields an accurate estimation of time-specific dynamic corporate sustainability performance over multiple periods. Specifically, we find that it is essential to integrate the corporate image of CSR activities into the evaluation of dynamic corporate sustainability performance. We also find that performance results have a better explanation and practical significance to the actual situation. Thus, our performance ranking results and cluster analysis can help stakeholders identify investment decisions as they seek out the most worthwhile investment firms and groups of firms. Additionally, our findings can help policymakers identify inter-temporal corporate sustainability performance trends.
Similar content being viewed by others
References
Artiach, T., Lee, D., Nelson, D., & Walker, J. (2010). The determinants of corporate sustainability performance. Accounting and Finance, 50(1), 31–51. https://doi.org/10.1111/j.1467-629X.2009.00315.x
Attig, N., Boubakri, N., Ghoul, E., & Guedhami, O., S., &. (2016). Firm internationalization and corporate social responsibility. Journal of Business Ethics, 134(2), 171–197. https://doi.org/10.1007/s10551-014-2410-6
Campbell, J. T., Eden, L., & Miller, S. R. (2012). Multinationals and corporate social responsibility in host countries: Does distance matter? Journal of International Business Studies, 43(1), 84–106. https://doi.org/10.1057/jibs.2011.45
Chang, D. S., Kuo, L. R., & Chen, Y. (2013a). Industrial changes in corporate sustainability performance–an empirical overview using data envelopment analysis. Journal of Cleaner Production, 56(1), 147–155. https://doi.org/10.1016/j.jclepro.2011.09.015
Chang, D. S., Liu, W., & Yeh, L. T. (2013b). Incorporating the learning effect into data envelopment analysis to measure MSW recycling performance. European Journal of Operational Research, 229(2), 496–504. https://doi.org/10.1016/j.ejor.2013.01.026
Chang, H., Choy, H. L., Cooper, W. W., Parker, B. R., & Ruefli, T. W. (2009). Measuring productivity growth, technical progress, and efficiency changes of CPA firms prior to, and following the sarbanes–oxley act. Socio-Economic Planning Sciences, 43(4), 221–228. https://doi.org/10.1016/j.seps.2008.11.002
Chauhan, Y., Wadhwa, K., Syamala, S. R., & Goyal, A. (2015). Block-ownership structure, bank nominee director and crash-risk. Finance Research Letters, 14, 20–28. https://doi.org/10.1016/j.frl.2015.07.002
Chen, C. M., & van Dalen, J. (2010). Measuring dynamic efficiency: Theories and an integrated methodology. European Journal of Operational Research, 203(3), 749–760. https://doi.org/10.1016/j.ejor.2009.09.001
Colapinto, C., Jayaraman, R., Abdelaziz, F. B., & La Torre, D. (2019). Environmental sustainability and multifaceted development: Multi-criteria decision models with applications. Annals of Operations Research, 293, 405–432. https://doi.org/10.1007/s10479-019-03403-y
Deng, X., Kang, J. K., & Low, B. S. (2013). Corporate social responsibility and stakeholder value maximization: Evidence from mergers. Journal of Financial Economics, 110(1), 87–109. https://doi.org/10.1016/j.jfineco.2013.04.014
Doumpos, M., Liadaki, A., Zopounidis, C., & Gaganis, C. (2009). Estimating and analyzing the efficiency and productivity of bank branches: Evidence from Greece. Managerial Finance, 35(2), 202–218. https://doi.org/10.1108/03074350910923518
Düzakın, E., & Düzakın, H. (2007). Measuring the performance of manufacturing firms with super slacks based model of data envelopment analysis: An application of 500 major industrial enterprises in Turkey. European Journal of Operational Research, 182(3), 1412–1432. https://doi.org/10.1016/j.ejor.2006.09.036.
Emrouznejad, A., Anouze, A. L., & Thanassoulis, E. (2010). A semi-oriented radial measure for measuring the efficiency of decision making units with negative data, using DEA. European Journal of Operational Research, 200(1), 297–304. https://doi.org/10.1016/j.ejor.2009.01.001
Färe, R., Grosskopf, S., & Tyteca, D. (1996). An activity analysis model of the environmental performance of firms–application to fossil-fuel-fired electric utilities. Ecological Economics, 18(2), 161–175. https://doi.org/10.1016/0921-8009(96)00019-5
Fukuyama, H., & Weber, W. L. (2017). Measuring bank performance with a dynamic network Luenberger indicator. Annals of Operations Research, 250(1), 85–104. https://doi.org/10.1007/s10479-015-1922-5
Hsiao, H. C., Chang, H., Cianci, A. M., & Huang, L. H. (2010). First financial restructuring and operating efficiency: Evidence from Taiwanese commercial banks. Journal of Banking and Finance, 34(7), 1461–1471. https://doi.org/10.1016/j.jbankfin.2010.01.013
Kao, C., & Liu, S. T. (2014). Multi-period efficiency measurement in data envelopment analysis: The case of Taiwanese commercial banks. Omega, 47, 90–98. https://doi.org/10.1016/j.omega.2013.09.001
Kazemi, K., & Ghaemi, F. (2016). A study on the relationship between managerial ability and stock price crash risk of the listed firms on the Tehran Stock Exchange (using data envelopment analysis). In: International Journal of Humanities and Cultural Studies (IJHCS) ISSN 2356–5926, 1380–1392.
Kim, Y., Li, H., & Li, S. (2014). Corporate social responsibility and stock price crash risk. Journal of Banking and Finance, 43, 1–13. https://doi.org/10.1016/j.jbankfin.2014.02.013
Korhonen, P. J., & Syrjänen, M. J. (2003). Evaluation of cost efficiency in Finnish electricity distribution. Annals of Operations Research, 121(1), 105–122. https://doi.org/10.1023/A:1023355202795
Lee, K. H., & Saen, R. F. (2012). Measuring corporate sustainability management: A data envelopment analysis approach. International Journal of Production Economics, 140(1), 219–226. https://doi.org/10.1016/j.ijpe.2011.08.024
Lee, M. T. (2016). Corporate social responsibility and stock price crash risk: Evidence from an Asian emerging market. Managerial Finance, 42(10), 963–979. https://doi.org/10.1108/MF-10-2015-0278
Lee, S., & Jung, H. (2016). The effects of corporate social responsibility on profitability. Management Decision, 54(6), 1383–1406. https://doi.org/10.1108/MD-07-2015-0268
Lo, S. F., & Lu, W. M. (2009). An integrated performance evaluation of financial holding companies in Taiwan. European Journal of Operational Research, 198(1), 341–350. https://doi.org/10.1016/j.ejor.2008.09.006
Lourenço, I. C., & Branco, M. C. (2013). Determinants of corporate sustainability performance in emerging markets: The Brazilian case. Journal of Cleaner Production, 57, 134–141. https://doi.org/10.1016/j.jclepro.2013.06.013
McWilliams, A., Siegel, D. S., & Wright, P. M. (2006). Corporate social responsibility: Strategic implications. Journal of Management Studies, 43(1), 1–18. https://doi.org/10.1111/j.1467-6486.2006.00580.x
Meiseberg, B., & Ehrmann, T. (2012). Lost in translation? The prevalence and performance impact of corporate social responsibility in franchising. Journal of Small Business Management, 50(4), 566–595. https://doi.org/10.1111/j.1540-627X.2012.00367.x
Meng, X. (2010). Interactive relation between corporate social responsibility disclosure and the cost of capital: An analysis framework based on asymmetric information. Account Research, 9, 25–29
Oliveira, G. D., & Dias, L. C. (2020). The potential learning effect of a MCDA approach on consumer preferences for alternative fuel vehicles. Annals of Operations Research, 293, 767–787. https://doi.org/10.1111/j.1467-629X.2009.00315.x
Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3), 403–441. https://doi.org/10.1177/0170840603024003910
Schiuma, G., Lerro, A., Parisi, C., & Hockerts, K. N. (2008). Managerial mindsets and performance measurement systems of CSR-related intangibles. Measuring Business Excellence, 12(2), 51–67. https://doi.org/10.1108/13683040810881199
Sengupta, J. K. (2000). Quality and efficiency. Economic Modelling, 17(2), 195–207. https://doi.org/10.1016/S0264-9993(99)00027-9
Shen, C. H., Wu, M. W., Chen, T. H., & Fang, H. (2016). To engage or not to engage in corporate social responsibility: Empirical evidence from global banking sector. Economic Modelling, 55, 207–225. https://doi.org/10.1016/j.econmod.2016.02.007
Silberhorn, D., & Warren, R. C. (2007). Defining corporate social responsibility: A view from big companies in Germany and the UK. European Business Review, 19(5), 352–372. https://doi.org/10.1108/09555340710818950
Simpson, W. G., & Kohers, T. (2002). The link between corporate social and financial performance: Evidence from the banking industry. Journal of Business Ethics, 35(2), 97–109. https://doi.org/10.1023/A:1013082525900
Sirsly, C. A. T., & Lamertz, K. (2007). When does a corporate social responsibility initiative provide a first-mover advantage? Business and Society, 47(3), 343–369. https://doi.org/10.1177/0007650307299221
Tajbakhsh, A., & Hassini, E. (2015). A data envelopment analysis approach to evaluate sustainability in supply chain networks. Journal of Cleaner Production, 105, 74–85. https://doi.org/10.1016/j.jclepro.2014.07.054
Tone, K., & Tsutsui, M. (2010). Dynamic DEA: A slacks-based measure approach. Omega, 38(3–4), 145–156. https://doi.org/10.1016/j.omega.2009.07.003
Tsionas, M. G., Merikas, A. G., & Merika, A. A. (2012). Concentrated ownership and corporate performance revisited: The case of shipping. Transportation Research Part E: Logistics and Transportation Review, 48(4), 843–852. https://doi.org/10.1016/j.tre.2012.01.004
Van Beurden, P., & Gössling, T. (2008). The worth of values–a literature review on the relation between corporate social and financial performance. Journal of Business Ethics, 82(2), 407–424. https://doi.org/10.1007/s10551-008-9894-x
Wu, S. W., Lin, F., & Wu, C. M. (2014). Corporate social responsibility and cost of capital: An empirical study of the taiwan stock market. Emerging Markets Finance and Trade, 50(s1), 107–120.
Xidonas, P., Doukas, H., Mavrotas, G., & Pechak, O. (2016). Environmental corporate responsibility for investments evaluation: An alternative multi-objective programming model. Annals of Operations Research, 247(2), 395–413. https://doi.org/10.1007/s10479-015-1820-x
Yang, F. C. (2016). Integrating corporate social responsibility and profitability into best practice selection: The case of large Taiwanese firms. Quality and Quantity, 51(4), 1493–1512. https://doi.org/10.1007/s11135-016-0348-8
Yeh, L. T. (2020). Analysis of the dynamic electricity revenue inefficiencies of Taiwan’s municipal solid waste incineration plants using data envelopment analysis. Waste Management, 107, 28–35. https://doi.org/10.1016/j.wasman.2020.03.040
Acknowledgements
L.-T. Yeh thanks the Ministry of Science and Technology, Taiwan, which provided funding through contract MOST 106-2410-H-035 -011.
Funding
This work was supported by the Ministry of Science and Technology, Taiwan [grant numbers MOST 106-2410-H-035 -011].
Author information
Authors and Affiliations
Contributions
Yeh, L.T. designed and performed the research, collected and analysed the data, and wrote the manuscript.
Corresponding author
Ethics declarations
Conflicts of interests
The authors declare that they have no conflict of interest.
Additional information
Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Yeh, LT. Integrating corporate image of corporate social responsibility, stock price crash risk and profitability into a dynamic corporate sustainability performance measurement. Ann Oper Res 305, 325–345 (2021). https://doi.org/10.1007/s10479-021-04182-1
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10479-021-04182-1