The relationship between corporate social and financial performance in the real estate industry

: a global study

Abstract

The importance of Corporate Social Performance (CSP) as a strategic tool for businesses has earned substantial attention in recent years. This study aims to explore the relationship between CSP and Corporate Financial Performance (CFP) in the real estate industry. To achieve this objective, the study utilises a global dataset of 282 publicly listed real estate companies with ESG ratings operating worldwide between 2010 and 2021. A random­effects panel data model with one­year time lags is employed to examine the direction of the relationship between CSP and CFP. The results reveal a strong negative association between CSP and CFP in the real estate sector. The observed relationship can be justified by the trade­off and managerial opportunism hypotheses. This research adds value to the existing literature by presenting global industry­specific evidence based on several financial performance metrics, namely return on assets (ROA), funds from operations to total assets (FFO), Tobin’s Q (TOQ), and market­to book ratio (MTB). By including accounting­based and market­based measures, this research provides a robust assessment of the relationship between CSP and CFP in the real estate industry.

Date of Award	26 Jun 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Zoe Venter (Supervisor)