Abstract:

The aim of this paper is to empirically assess the determinants of CSR, as measured by inclusion in FTSE4Good Index, with the help of panel data econometric techniques. Drawing on a combined theoretical framework represented by stakeholder theory and resource-based view of the firm, this study adopts a firm perspective to focus on key determinants of CSR in a cross-country analysis among developed European companies. The results reported in this study provide evidence that larger firms, firms exhibiting relatively strong financial performance in prior period, as well as firms with higher level of operating cash flows, are more likely to have higher levels of CSR. Firms with higher sales growth are relatively less likely to commit resources to CSR, contrary to our predictions. No conclusive evidence is found for an association between leverage and CSR.