Do Good and Do Well: An Empirical Study of the MSCI World

The purpose of our study is to examine the effect of Corporate Social Responsibility on Corporate Financial Performance. We initially perform a multiple linear regression using Ordinary Least Square on an academically recurring model, and then apply cross sectional fixed effect to account for heterogeneity. Our panel data is composed of approximatively 1500 companies over a five year span, totalizing more than 10000 observations. A primary contribution that we make to the question is introducing country law regime as a control variable, based on Liang & Renneboog (2017) predicator model of CSR. We use Sustainalytics ratings to proxy for CSR as their analyses fulfill the latest academic requirement on the question. Mixed evidence of the effect of CSR on CFP is found, and we also confirm the significance of country law regime as a predicator. (Less)