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...rations cannot afford pursuingssocial ends at the cost of losing customers and investors, Milton Friedman arguedsthat “the business of business is to make a profit, not to engage in beneficial acts”s(=-=Friedman, 1970-=-). This statement implies that corporations should not pursuessocial ends as they are not appropriate vehicles for social benevolence (Reich,s2008). In regards to the argument from proponents of the s...

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...e model’s residuals, using the Jarque-Bera Normality Test. Because weshave a sample exceeding 200 observations, we refer to the central limit theorems(CLT), which states that we can assume normality (=-=Ramanathan, 2002-=-). Finally,sFiori et al. (2008) state that they have a cross-sectional data. However, we feelsthat there is also a time aspect that needs to be taken into account. This aspect willsbe taken into consi...

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...ocus on investors’ evaluations and expectations regarding the performancesof a corporation. Because of this, market-based measures are not susceptible tosaccounting rules and managerial manipulation (=-=Scholtens, 2008-=-). In their study,sFiori et al. (2008) assume that capital markets are semi-strong efficient,ssuggesting that the market recognizes information available to the public, which issthen embedded in the s...

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...struly committing to act in a socially responsible manner. It, then, seems as thoughsglobalization combines a race for both low production costs and increasedsdemands for CSR (Heslin and Ochoa, 2008; =-=Sacconi, 2004-=-).sDuring recent decades, social audits have been used as a tool aimed atsmeasuring the social performance of corporations. During 1995-1999, the assetsvalue of mutual funds who invest in socially scr...

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...promotesand realize a sustainable development. This has prompted corporations to balancestheir global activities between growth strategies and considerations of corporatessocial responsibility (CSR) (=-=Cernic, 2009-=-; Kolk and Tulder, 2010). Taking intosaccount the complicated global networks of subsidiaries and suppliers, attemptedsefforts to regulate the behavior of corporations have been unsuccessful. Instead,...

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...77.000 global corporations with more than 770.000 subsidiaries,sand millions of suppliers spread out across the world. Globalization has, thus,spaved the way for very large and powerful corporations (=-=Harrison, 2010-=-). Alongswith this development, the relations between corporations and their stakeholders,ssuch as shareholders, employees, customers, and the societies within whichscorporations operate, have been al...

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... human rights in areas of environmentalsprotection, safety at work, elimination of child labor and anti-corruption, thissdefinition is connected to regulation, such as international human rights laws(=-=McInerney, 2007-=-; van der Putten, 2005).sSince all of the above definitions are useful, it is not an easy task to determineswhich one of them to use in this study. Using economic terminology, whichsemphasizes externa...

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...te managers have found themselves in a positionswhere they have to make a trade-off between satisfying all their relevantsstakeholders on the one hand, and satisfying their shareholders on the others(=-=Reich, 2008-=-).sIt has been argued that corporations that engage in CSR activities gainsbenefits such as, among other things, a better reputation, the ability to sell itssproducts at premium prices, as well as the...