Risk and return efficiency of manufacturing firms: Integrating corporate social responsibility performance

This paper uses Data Envelopment Analysis to assess the performance of stocks in terms of return on assets, risk and their Environmental‐Social‐Governance score. Next, latent class analysis (LCA) is used to determine groups with similar performances and relates group membership to a set of covariate...

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Bibliographic Details
Published inCorporate social-responsibility and environmental management Vol. 31; no. 5; pp. 3735 - 3744
Main Authors Martínez‐Victoria, MCarmen, Lansink, Alfons Oude
Format Journal Article
LanguageEnglish
Published Chichester, UK John Wiley & Sons, Inc 01.09.2024
Wiley Periodicals Inc
Subjects
corporate social responsibility
Data envelopment analysis
efficiency analysis
Latent class analysis
Manufacturing
Performance assessment
Return on assets
Risk
risk–return
Social responsibility
Stocks
Europe
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Summary:This paper uses Data Envelopment Analysis to assess the performance of stocks in terms of return on assets, risk and their Environmental‐Social‐Governance score. Next, latent class analysis (LCA) is used to determine groups with similar performances and relates group membership to a set of covariates. The empirical application employs a set of 139 European manufacturing companies from 2016 to 2021 period. The results suggest stocks on average perform 25% below their potential in each of the three dimensions. The LCA suggests five groups and membership of lower performance classes significantly relates with lower size, R&D expenses and Tobin's Q.
ISSN:1535-3958
1535-3966
DOI:10.1002/csr.2766