User:Reyes.hannah/sandbox

(Inserted below Cost-Benefit Analysis)

CSR and Corporate Financial Performance
The relationship between corporate social responsibility and a firm's corporate financial performance is a phenomena that is being explored in a variety of research studies that are being conducted across the world. Based on these research studies, including those conducted by Sang Jun Cho, Chune Young Chung, and Jason Young, a positive relationship exists between a firm's corporate social responsibility policies and corporate financial performance. In order to investigate this relationship, the researchers conducted a regression analysis, and preceded the analysis with provision of several measures that they utilized to serve as proxies for key financial performance indicators (i.e. return on assets serves as a proxy for profitability).

(Sub-section of Implementation) OR make a new section--Considerations?? OR criticisms and concerns?

LINK TO POTENTIAL BUSINESS BENEFITS SECTION!

Emerging Markets vs. Developed Economies
Although a positive relationship has been shown to exist between CSR and a firm's corporate financial performance, results from these analyses may need to be examined under different lenses for emerging and developed economies, especially since firms based in emerging economies oftentimes have weak firm-level governance.

In an article written by Paulina Księżak, she states that for companies operating in emerging markets, engaging in CSR practices enables widespread reach into a variety of outside markets, an improved reputation, and stakeholder relationships. Yet, in all cases (emerging markets vs. developed economies), implementing CSR policies into the daily activities and framework of a company has been shown to allow for a competitive advantage versus other companies, including creation of a positive image for the company, improved stakeholder relationships, increased employee morale, and attraction of new consumers who are committed to social responsibility. Despite all of the benefits, it is important to note that several drawbacks exist, including possible accusations of hypocrisy, the difficulty of measuring social impact of CSR policies, and oftentimes placing companies at a disadvantage against competitors when prioritizing CSR ahead of advancing a company's R&D.

(Under controversial industries)

Case Studies
To fully observe the impact of corporate social responsibility practices on a firm’s corporate financial performance, it is important to delve into a concrete example, such as the study conducted by researchers from the Global Conference on Business, Economics, Management, and Tourism. In this study, Mocan, Draghici, Ivascu, and Turi examined the correlation between CSR policies and value creation/financial performance in the banking industry specifically, and found that various benefits include greater economic efficiency, improved company reputation and employee loyalty, better communication streamline between the industry and individuals, and the opportunity to attract new opportunities (i.e. attract new investments, or remain competitive) and improve organizational commitment. However, before discussing these effects, the researchers preceded the analysis by stating that typically implementing CSR and other ethical principles within the framework of a financial institution such as banks makes it seem as if these are marketing tools for attracting and communicating with stakeholders rather than serving as tools that afford banks and other financial institutions the opportunity to benefit the individuals that they serve.