Responsible Investment

Corporate social and financial performance: a meta-analysis

February 6, 2008

Using meta-analysis statistical techniques, the authors Marc Orlitzky (The University of New South Wales), Frank Schmidt and Sara Rynes (both University of Iowa) conclude that “there is a positive association between CSP and CFP across industries and across study contexts” (“True Score” r = .3648) and that this relationship “varies (from highly positive to modestly positive) because of contingencies, such as reputation effects, market measures of CFP, or CSP disclosures.” Importantly, CSP was a better predictor of CFP using accounting measures than market-based ones.

The study does an unusually thorough job of analyzing possible confounding issues. For example, some analysts have expressed concern about availability bias — i.e., that studies failing to show a positive relationship between social responsibility and financial performance are unlikely to be published. The authors conduct a “file drawer” analysis demonstrating that the number of such studies would have to be very high (as many as 1,000) to change their overall conclusions. The direction of causality, another difficult question, is addressed directly using several different statistical techniques: “the causation seems to be that CSP and CFP mutually affect each other through a virtuous cycle: financially successful companies spend more because they can afford it, but CSP also helps them become a bit more successful.”

A detailed discussion of the results interprets the findings in the context of current management theories about corporate social responsibility.

This study was awarded the 2004 Moskowitz Prize (awarded by the Center for Responsible Business at the Haas School of Business, in cooperation with the Social Investment Forum, the Moskowitz Prize promotes the concept, practice, and growth of socially responsible investing).


This article was previously published on, February 6, 2008.

This article may be reproduced according to our terms of use with attribution (and link, if online) to To be cited as: “Corporate social and financial performance: a meta-analysis”, Lloyd Kurtz,, February 6, 2008.

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