The elusive relationship between Corporate Social and Financial Performance: Meta-analyzing four decades of misguided evidence

Although a large number of existing primary studies and meta-analyses on the link between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP) may suggest that the field is saturated, we show that the prevailing understanding needs revision. By using advanced meta-analytical techniques and levering on the multifaceted nature of empirical work, we find evidence that 1) the CSP-CFP relationship is moderated by a range of contextual factors including industry, stakeholder type, and institutional characteristics, 2) the CSP-CFP link is mediated by a number of organization-level variables, and that 3) both CSP and CFP are jointly determined by organizational field variables and firm specific variables. Together, our study results call into question the existence of a direct relationship between the focal constructs.