The Impact of Adopting Corporate Social Responsibility on Corporate Financial Performance: Evidence From Italian Listed Companies

Abstract

This paper aims to analyse whether social rating can impact on financial performance of major Italian companies listed on the stock exchange and, subsequently, whether the Italian stock market has proved awareness of social and environmental issues.

The study will highlight how companies included in the Italian FTSE MIB index have reacted to the Subprime Mortgage and Sovereign Debt crises, opting for socially responsible investments. The analysis describes the stock exchange trend of the FTSE MIB index companies, considering the ethical rating assigned to them by Standard Ethics on a yearly basis, over a period ranging from 2007 to 2013.

The results of the Panel Data analysis conducted on the chosen sample seek to explain whether an ethical rating is a discriminating variable for an investor, analysing the existence of a significant relationship between socially responsible investments of a listed company and its stock market performance.