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Exploring the Curvature of the Relationship Between HRM–CSR and Corporate Financial Performance

Abstract

This article contributes to the general literature on the relationship between corporate social performance and corporate financial performance, as well as to the emerging HRM–CSR literature, by exploring the curvature of the relationship between HRM–CSP and CFP. We advance conceptual arguments in favor of an inverted U-shaped relationship. Our results demonstrate a significant quadratic relationship between HRM–CSP and CFP. We provide evidence that this relationship is not linear or S-shaped but rather inverted U-shaped.

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Notes

  1. We would like to thank an anonymous reviewer for highlighting this argument. We recognize that diminishing returns are not necessarily the result of objective mechanisms but can result from stakeholders' perceptions and induced effects in terms of attitudes and behaviors.

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Acknowledgements

The authors would like to thank the LIPHA research laboratory of the Université Paris Est and ESSCA School of Management for their support and for the funding provided for this study. We also thank the company VIGEO-EIRIS, which made its database available to us under the VIGEO-EIRIS/ESSCA partnership. In addition, we extend special thanks to the editor Valérie Swaen and to the anonymous reviewers for their comments, advice, and suggestions. Any remaining errors are, naturally, the sole responsibility of the authors.

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Correspondence to Guillaume Schier.

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Meier, O., Naccache, P. & Schier, G. Exploring the Curvature of the Relationship Between HRM–CSR and Corporate Financial Performance. J Bus Ethics 170, 857–873 (2021). https://doi.org/10.1007/s10551-019-04332-3

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Keywords

  • HRM–CSR
  • Corporate financial performance
  • Corporate social performance
  • Inverted U-shaped relationship