Corporate social responsibility in agri-food firms: the relationship between CSR actions and firm’s performance

: Over the last years, many firms introduced environmental and social sustainability in their business mission and adopted Corporate Social Responsibility (CSR) as the operative tool of a new business model. Several studies focused on the relationship between CSR and firm’s performance or more generally value creation in the supply chain. The present work aims at giving further insight into this relationship with reference to the agri-food sector. It wants to illustrate a conceptual framework of this relationship and represents a preliminary empirical work aimed at understanding and testing some main link. Through multivariate techniques data on CSR actions were analysed to identify the firm CSR strategies and using the correlation analysis and non-parametric tests the link between CSR strategies and firm performance was tested, both directly and through innovation variables. Results highlighted that firms with lower CSR orientation have also lower profitability levels and showed the association between the adoption of specific innovations and some CSR patterns, while the connection innovation-performance was not statistically proved. The small size of the sample does not allow a conclusive analysis. Nevertheless, results provide useful insights to better specify the conceptual model CSR-performance.


Introduction
Over the last years, many firms introduced environmental and social sustainability in their business mission and adopted Corporate Social Responsibility (CSR) as an operative tool of a new business model [1,2]. CSR is a rather wide and someway vague concept because it has progressively included different domains to reflect the evolving of society's concerns, but also because it has been analysed by different approaches and points of view [3][4][5].
According to the Carroll approach [6,7] "Corporate social responsibility encompasses the economic, legal, ethical, and discretionary (philanthropic) expectations that society has of organizations at a given point in time". Then, in Carroll's definition CSR is related to categories of business responsibility and has a dynamic nature, as it changes with society's expectations. However, very different definitions of CSR are available in the literature. Dahlsrud [4] found 37 different definitions of CSR and by analysing them identified five main dimensions that characterize this concept: environmental, social, economic, stakeholders and voluntariness dimensions. These dimensions are well synthesised by the Green Paper of EU Commission [8] where Corporate Social Responsibility is referred to actions undertaken by the company to cope with environmental and social issues beyond regulatory requirements and implying the interaction with stakeholders (employees, customers, community). Therefore, in CSR the responsibility categories overlap and intertwine with the more general issues of sustainable development: firms undertaking CSR actions are involved in a global sustainable development pattern, where sustainability includes economic, social and environmental aspects, according to the so-called Triple Bottom Line approach (TBL) or Three P model (Planet, People and Profit) proposed by Elkington [9].
The overlapping of CSR and sustainability issues is particularly relevant in the agri-food sector. As underlined by several studies [10][11][12][13], many motivations make CSR actions relevant for the food sector. First, the production process is closely linked to the use of natural resources, mainly land, water and energy, and therefore firms' choices have a direct impact on the environment. Secondly, over the last decades many scandals have taken place that highlighted health risks related to food production and caused consumers to ask for more information on production methods. Moreover, consumer preferences are evolving towards more environmentally and socially responsible products, and consumers are more and more interested in ethical and social food attributes.
Therefore, Corporate Social Responsibility in the agri-food sector involves many fields of action and, hence, has received attention by scholars of different disciplines and approaches. Maloni and Brown [10] identified eight categories of CSR; some of them are common to all industries, others are specific for the food supply chain: biotechnology, animal welfare, labour and human rights, health and safety, community, environment, fair trade and procurement. These issues have been analysed by different points of views that mainly focused on: i) the integration of CSR into the firm's business strategy or the food supply chain [14][15][16]; ii) consumers' perception of CSR [17][18][19][20] and iii) the relationship between CSR and firm's performance or more generally value creation in the supply chain [13,[21][22][23][24].
The present work aims at giving further insight into the relationship between CSR and a firm's economic performance in the agri-food sector. It wants to illustrate a conceptual framework of this relationship and represents a preliminary work aimed at understanding and testing some main link. In particular, the work wants to investigate the following research questions: 1) Does a relationship between CSR strategies of agri-food firms and their economic and financial performance exist?
2) Do CRS actions directly affect a firm's performance, or some variables play a mediating role?
The paper is structured as follows. section 2 focus on the link between CSR and financial performance and presents a conceptual scheme of this relationship. Section 3 describes data and methods used to analyse the main CSR-performance association. In section 4, the results of data analysis are presented and section 5 summarizes the main findings and conclusions.

CSR and economic performance
The focus of scholars on CSR issues varies according to their theoretical approach and the relevance given to specific aspects of the relationship between business and society. Garriga et al. [25] tried to classify the large number of studies on CSR and identified four groups of CSR theories by the relevance of the economic, political, social and ethical dimensions. Based on these dimensions they define instrumental, political, integrative, and ethical theories: instrumental theories assume that firm's only mission is wealth creation; political theories focus on the power of corporations and its use in society; integrative theories look at the way business can satisfy social demands; ethical theories analyse ethical responsibilities that relate corporations to society.
Limiting to the economic dimension of CSR, within the instrumental approach many theoretical and empirical studies investigated the direct and indirect links between CSR actions and a firm's performance. CSR is considered as part of a business strategy aimed at increasing revenues and profits in different ways: reducing costs and increasing factors productivity, reaching new markets, enforcing customer's relationship, creating a firm's reputation [13]. This view is rather controversial. Some studies recall that the only "social responsibility of business is to increase its profits" [26] and associate to CSR practices higher costs and competitive disadvantages. Moreover, the use of corporate resources to finance social or environmental goals reduces shareholders' benefits and represents an "agency loss" [27]. On the contrary, a larger number of empirical studies show a positive relation between CSR and CFP. These studies assume two different models that link CSR and CFP [28]. According to the first model, CSR practices are treated as a resource that can increase benefits or reduce costs, e.g. a better relationship with employees could improve their effort and decrease absenteeism, the use of recycled inputs and the reduction of wastes could reduce costs. At the same time, the adoption of environment-friendly methods or a better relationship with no-profit organizations could allow access to new markets. In the second model the focus is not on the substantive impact of CSR but on its appeal. What is relevant is the image of the firm as a company involved in "doing good". This appeal will act as a differentiation factor and will generate a higher demand for its products or stocks and higher consumers' willingness to pay [28].
The link between CSR and performance can also be indirect and several variables, both internal and external to the firm, can play a role of mediators of the CSR-CFP relationship. Perrini et al. [29], by systematizing several previous studies, illustrated a comprehensive framework of the relationship between CSR practices and performance drivers and outcomes. Following a stakeholder theory approach, Perrini et al. [29] distinguished CSR practices by the field or the category of stakeholder they affect and identified which factors they act on that finally reflect on cost or revenue related outcomes. As an example, CSR efforts acting on customers influence trust, reputation, and satisfaction; the integration of CSR criteria into vendors selection and the involvement of operators of the supply chain have effects on quality, trust and innovation; dialogue with society and the involvement in the community development determine organizational change and innovation; CSR efforts aimed at preventing environmental impacts imply innovation, reliability, and reputation.
Thus, quality, reputation, trust, innovation, and social capital represent mediating forces linking CSR actions to a firm's performance. As a fact, CSR practices require a better internal organization, the employees' involvement, and make managers develop higher competencies and skills that in turn reflect in better firm's results. On the other side, CSR disclosure helps to build the firm's reputation that reflects in better market results [30]. Some authors proved that CSR measures focusing on environmental protection contribute to the adoption of innovation and the creation of new business models, new products, new market opportunities [31]. A positive correlation between innovation and CSR is stated by McWilliams and Siegel [32], who argue that CSR strategies promote investments in R&D and therefore can create either process or product innovations. Sharma and Vredenburg [33] relate a firm's proactive environmental behaviour to the development of organizational capabilities that in turn influence the ability to innovate.
Following Perrini et al. [29], two aspects can be underlined. Firstly, CSR involves several fields of analysis and actions that are intertwined in defining some intangible resources such as reputation, trust, firm' reliability. As a consequence, to catch the relationship between CSR and CFP, a CSR measure should be able to reflect the firm's strategy as a whole and synthesise the link between CSR and the intangible drivers of performance. Secondly, to understand the CSR-CFP relationship, the analysis of the direct link might not be enough and further research should aim to explain both the way CSR practices generate intangible driver factors and how these drivers act on economic and financial outcomes [29]. This analysis is the most theoretically relevant, but also the most complex, challenging work. Figure 1 illustrates the conceptual scheme we are assuming. CSR actions can be referred to economic, social and environment components and can interest different stakeholders. The specific combination of CSR actions defines the business CSR strategy that directly reflects on the firm's performance. Besides that, there is a role of mediating driving factors that link CSR and CFP: quality, innovation, trust, reputation, social capital are influenced by the CSR strategy and act on the firm's performance. Moreover, a set of control variables can be deemed to affect the weight and the sign of the links. We could expect that the location of the firm [34,35], the legal status [36], the size [37,38], the experience [39] and the specific productive sector [13,40,41] can act in this sense.
As far as economic and financial performance is concerned, in previous works it has mainly been assessed employing accounting-based measures of financial returns, such as return on assets and return on equity or market (stock) return. As a fact these indicators are partial, can be dependent on conjunctural factors, and don't consider whether the business strategy is proactive or rather reactive, which is responding to external pressures. Sometimes, CSR strategy may aim at broadening the firm's market, catching new market segments, or just keeping the current market share, and therefore a performance indicator should be able to assess the results in these fields. Moreover, a more comprehensive view of CSR effects underlines how CSR actions influence the value creation in the food supply chain as a whole and produce non-market outputs [13] that can contribute to increasing the firm's value as well as to determine public benefits.

Figure 1. A conceptual scheme of CSR actions -firm's performance relationship
The present work aims at analysing these links. It represents a preliminary and descriptive study as it concerns a small sample of agri-food firms and investigates only one of the driving forces, that is innovation. Further insight will be necessary to identify the whole set of mediator factors, as well as to test the direction of the relationship [42].

Material and methods
Data collection was carried out in two steps. First, a list of Italian agri-food firms operating in the dairy and fruit and vegetable industries has been extracted from the database AIDA of Bureau van Dijk that includes detailed information on Italian companies, such as financial data, legal entity details, and corporate structures (Data were extracted with reference to the codes NACE codes 1032, 1039 and 1051 which refer to activities of processing and handling vegetables and fruit and milk). Besides general information such as the address, telephone number, localization, legal form, firm's age, number of employees, extracted data included profitability and financial indicators, assets and liabilities, revenues, and costs. Data refer to the last available balance sheets (years 2018 or 2019).
Starting from this firms' list, companies were reached by phone and were asked to fill a questionnaire that was sent by mail. The questionnaire was distinguished in three sections: -CSR actions undertaken by the firm and their relevance in the business strategy; Innovations undertaken in the last three years; -Main structural, production, and market characteristics of the firm. As CSR measures are concerned, following Herrera-Madueño et al. [43], actions undertaken by the firm were grouped around four fields, that is environment, employees, society, and customers. In the two sections, sustainability view and CSR actions, items were measured on a five-point Likert scale, with points going from 1=Totally disagree to 5=Totally agree.
Almost 300 firms have been reached by phone but only 40 questionnaires have been filled. Given the small sample, the present work represents a preliminary analysis and only has a descriptive nature mainly aimed at better defining the conceptual framework presented in Figure 1 and testing some of the main hypothesised links. Table 1 illustrates some descriptive statistics of respondents. Data analysis is divided into two parts: i) through multivariate techniques we analysed data on CSR actions to identify the firm CSR strategies; and (ii) using the correlation analysis and nonparametric tests we tested the link between CSR strategies and firm performance, both directly and through innovation variables. Moreover, the analysis of variance (ANOVA) was used to test whether differences of CSR strategies and performance indicators exist according to control variables with a categorical nature.

The firms' CSR strategies
CSR strategies have been evaluated by asking firms to indicate whether they undertook a set of actions that can be referred to different fields/stakeholders [42,44]: environment, employees, customers and local community ( Table 2). The internal consistency of answers related to the four fields was tested through Cronbach's statistics. The four subscales produced acceptable results (alphaENV= 0.8622; alphaEMP = 0.7227; alphaCUS = 0.9430; alphaCOM = 0.8362).
A first aspect to be underlined is the homogeneous behaviour of firms towards customers. Ninety percent or more of respondents declare they usually adopt measures to avoid customers' complaints, answer their needs, and properly inform consumers (The frequency of adoption of CSR measures in the four fields of analysis was measured by distinguishing the answers of firms who stated they strongly agree or agree to the specific item (category= Yes) from those who do not (category = No). That is strongly related to the evolution that characterized food demand and the closer attention the consumers pay to food quality and security. Then, the attention of firms towards customers' needs seems to be the necessary consequent strategy to stay on the market, more than a choice that reflects a proactive behaviour towards the firm's CSR development.
As far as environmental actions are concerned, only 50% of interviewed voluntarily exceed environmental regulations and periodically perform internal audits. A higher share of firms (about 80%) is involved in actions that concern energy saving and the use of alternative sources of energy. Therefore, closer attention to the environment seems to be related to actions that directly influence production costs. Nevertheless, it should be noted that this type of action is associated with environmental (corr = 0.3330, Sig. = 0.05) and social (corr = 0.341, Sig. = 0.05) certifications, then could also be linked to the business image and marketing strategies. balance work-life time and 67% state to take into account the interests of employees in the firm's decision-making.
The social side of CSR mostly concerns the relationship with the local community. In this field firms mainly focus on keeping a transparent relationship with the local public authority (77% of firms) or supporting sport and cultural activities (61%), while 41% of interviewed take into account the interests of local community in their decision making and 54% support programs for disabled people.
Looking at the co-operatives and for-profit firms' behaviour, the only difference concerns the higher frequency of co-operatives that regularly perform environmental audits and take into account the employees' interest in their decision-making. No statistically significant difference exists between firm typologies regarding the other CSR actions. Table 3. PCA on CSR actions -Factor loadings matrix. Varimax Rotation method A synthetic view of the firm's CSR actions can be obtained by carrying out an explorative PCA. Table 3 illustrates the factor loadings that help to understand the meaning of each component. PCA extracted 5 components that explain 74% of the variance. They can roughly be identified as: actions focused on customers' needs; actions focused on community and social needs, which merge the attention to the local community with measures related to social needs of employees; actions focused on environmental protection; actions focused on the employee-firm relationship; actions focused on resources saving. It should be underlined that most of the variance is explained by the first three categories of actions, while the last two components account for a very small weight (Table 3). Two main results of this PCA should be underlined. First, following the framework of previous studies [42,44], we expected four components, one for each field/stakeholder category. On the contrary, in the empirical analysis, two components were extracted that refer to the environment field and their meaning suggests that CSR environmental actions should be better specified with reference to motivations that drive firm behaviour, that is a real concern for the environment, on one side, or economic objectives and cost reduction aims, on the other side. Secondly, the social involvement characterizes the firm's behaviour as a whole, with no distinction according to the stakeholder category (community or employees). Measures focused on employees represent a different group of actions when they deal with the firm-employee relationships (training and attention to stable job link) and therefore could be better related to the firm's organization and labour productivity objectives. The specific firm's strategy is defined by the set of CSR categories the firm carries out. Using a hierarchical cluster analysis, we identified 3 groups of firms characterized by different behaviour concerning the CSR actions synthesised by the extracted components. Cluster results (Table 4) and ANOVA (Table 5) show that: -The groups mainly differ as actions focused on customers' needs, environmental protection, and resources' use reduction are concerned. On the contrary, CSR actions related to the social field and actions focused on the employees-firm relationship are very largely distributed in each group without any statistically significant difference among them.
-Group 1 is mainly characterized by the relevance of measures aimed at environmental protection and share with group 3 the attention to customers' needs. The main difference between group 1 and 3 concerns the type of environmental measures they implemented: more focused on environmental protection in group 1, while resources' saving is more relevant in group 3. Moreover, group 3 shows a lower involvement in actions oriented to community and social needs. Group 2 has very different behaviour and is less oriented to CSR actions.

The firm's innovation behaviour
Almost all sampled firms introduced some innovation categories over the last three years. Table  6 gives an overall view of the frequency of different types of innovations. As far as process innovations are concerned, the improvement of production or distribution processes is the most widespread (90% of the sample), while less frequent is the introduction of new processes aimed at reducing costs (68% of the sample) or at adopting productions standards (58%). A large share of firms introduced new products (78%). Organizational innovations are quite frequent except for those that imply the development of new alliances and networks (40%). Table 6. Innovation frequency by category.

Innovation categories No Yes
We introduced new products or services 23% 78% We introduced changes in the product design/packaging 35% 65% We introduced new processes to favour the penetration in new markets 35% 65% We introduced new processes aimed at reducing production costs 33% 68% We improved our production or distribution processes 10% 90% We introduced production standards and social and environmental management systems 43% 58% We improved information and communication technologies 30% 70% We introduced some change in labour's organization 28% 73% We developed new alliances or networks 60% 40% The adoption of innovations is a multiplier process: in most cases the introduction of product innovations requires a change in the firm organization or processes, and process innovations require a change in the organization and so on. That is highlighted by the correlation indexes among innovation categories. The introduction of new products is associated with the introduction of new processes to favour the penetration in different markets (corr= 0.483, Sig. = 0.002), but also to the development of alliances and networks (corr= 0.318, Sig. = 0.046). The penetration in new markets is related to new information and communication technologies (corr= 0.663, Sig. = 0.000) and to the introduction of production standards and environmental and social management systems (corr= 0.323; Sig. = 0.042). New processes aimed at reducing production costs are correlated to change in labour's organization (corr= 0.529, Sig. = 0.000) and the introduction of production standards (corr= 0.483, Sig. = 0.002).
The correlation between CSR actions and the adoption of innovations can help to better investigate whether there is a link between these two fields. Table 7 shows that this link is generally very weak and, in particular: i) there is no link between product innovations and any of CSR actions; ii) resources' use reduction doesn't imply the introduction of some process innovation.
Nevertheless, some interesting relationship emerges: -actions focused on customer's needs are positively correlated to the introduction of new processes aimed at reaching new markets, to a change in the labour's organization and the ICT improvement; actions aimed at environmental protection are only related to ICT improvement. That highlights the role of communication in environmental strategies; -actions focused on employees are positively correlated to the introduction of new production and distribution processes and production standards. That mainly underlines the role of labour training in implementing some process change.

The economic and financial performance
Previous studies measured financial performance using indicators that referred to stock price increase or accounting return indicators [24,28,45,46]. In this work four accounting measures were employed, that is Return on Assets (ROA), Return on Investment (ROI), Return on Equity (ROE), and Return on Sales (ROS), and average values in the last three years were considered. The growth of turnover over the last 3 years was also considered, to take into account of CSR actions as part of a wider market strategy.
As far as the direct link CSR-performance is concerned, only some links emerged. In particular, the Kruskal-Wallis non-parametric test on financial indicators showed that ROE and ROA distributions are statistically different by groups of firms following different CSR strategies (Table 8). Moreover, pairwise comparison (Table 9) proved that a statistically significant difference exists between group 2 and the others. In particular, group 2 was characterized by a lower involvement in CSR practices and proved to have lower levels of both ROE and ROA values.  As far as the link innovation-performance is concerned, no statistically significant relationship emerged. Therefore, while an association between some categories of innovation and CSR actions is proved, we can't verify the role of innovation in the CSR-performance relationship. This result is unexpected but can depend on many factors: how innovation has been measured (whether or not a firm has adopted a specific innovation category), innovation typologies taken into account, and their disaggregation, the time lag that should be considered between the adoption of innovations and the economic outcomes, the financial indicators employed and so on.
To verify how control variables influence a firm's performance, t-test and ANOVA were performed on components' scores for groups distinguished by firms' location, size classes, legal form and age classes (Table 10). Significant differences at an alfa level of 0.05 only emerged in ROE and ROA values when the firm's size is considered, and in ROE when the firm's experience is considered. This result underlines the need to control for structural factors to better understand the CSRperformance relationship.

Discussion and conclusion
This work illustrates a conceptual framework of the relationships between CSR and firm profitability in the agri-food sector. In particular, we underlined the relevance of some intangible factors (innovation, reputation, trust, social capital) that may have a mediating role between CSR strategies and the firm's economic and financial performance and presented a preliminary empirical analysis aimed at verifying the direct CSR-performance association, as well as the CSR-innovationperformance link.
The connection CSR-performance has been investigated by several previous works but results of researches on this issue were rather controversial [28,30,47,48]. Most of them resulted in nonsignificant association and, when the effect of CSR on performance proved to be positive, it was generally small [28].
In our work there is an evidence that firms with lower CSR orientation have also lower profitability levels, but that should be controlled with respect to some structural factors, and therefore results can't be conclusive on this matter.
As far as the CSR-innovation-performance link is concerned, results highlighted the association between the adoption of specific innovations and some CSR patterns, e.g. a positive correlation exists between actions focused on customer's needs and process innovation, and between actions focused on employees and the introduction of production standards. Moreover, innovation in the ICT field is strongly related to CSR environmental practices, and that underlines the firm's need to communicate environmental CSR actions to build its reputation. On the contrary, the connection innovationperformance was not statistically proved.
Several factors influence the results. First of all, the small size of the sample and the related low data variability do not allow a conclusive analysis; secondly, there are problems related to innovation and firm's performance measures; lastly, the time lag between the adoption of innovations and the economic outcomes should be more carefully considered.
Nevertheless, this preliminary analysis provides some suggestions that can help in the following work.
First of all, in defining CSR actions, the four areas of CSR suggested by the stakeholder theory should be better specified. Our work highlighted that it is worthless to distinguish firm's social orientation according to social community and employees' areas, while some actions involving the employees-firm relationship mainly relate to economic objectives. They could represent a different field of CSR actions or it should be questioned whether they are part of a CSR strategy. Moreover, actions dealing with environment can reflect different firm's CSR orientation and strategy and then should be better distinguished. As a fact, the environmental commitment can assume different meanings according to the motivations that push it and the effects it has in terms of economic impact. Thus, to better understand firms' CSR orientation and strategies, CSR actions should be further specified.
Secondly, the analysis highlighted a relationship between CSR actions and process and organization innovations while no link has been found with respect to product innovations. Further analysis is needed to identify which innovations are relevant in CSR strategies and to test the direction of the CSR-innovation relationship.
Thirdly, findings only partially support the relationship between CSR and firm's financial performance. This finding is common to previous studies and suggests that company's accounting indexes might not be fully adequate to study the effects of CSR. As a fact, CSR actions affect the value creation of the food chain, that is related to market and non-market outputs [13,49]. The market effects could represent only one aspect of CSR results. Moreover, as far as firm is concerned CSR actions could produce effects in terms of keeping market shares or reaching new markets or could be the condition to stand in the market. In these cases, profitability indicators can't catch the economic consequences of firms' CSR strategies.
In summary, this study provides some new findings with respect to CSR fields and the link CSRperformance.
The classification of CSR actions according to stakeholders' approach is not useful when the focus of the analysis is on CSR in a sustainable development framework. Results show that some of CSR actions related to employees enter in the broader field of the corporate social responsibility, while others are more functional to firm's organization and management choices. These last ones should not be considered as component of the CSR strategy. As environmental actions are concerned, empirical results underline the need to distinguish them according to firm's objectives and CSR motivations (cost reduction rather than environmental protection). These findings are relevant because they highlight the need to analyse CSR actions within the frame of firm strategies.
With respect to the link CSR-innovation-performance the empirical results confirm a correlation between some CSR actions and process and organizational innovations, while no relationship has been proved between innovation and financial performance. That is relevant because it underlines the role of some innovation typologies in the implementation of CSR strategies, independently of a link to financial performance. Therefore, undertaking a CSR strategy implies changes in the process management and firm's organization to satisfy environmental and social goals of the new business model. In such a case, CSR strategies, not innovations, affect firm's performance.