Effect of Corporate Social Responsibility and Corporate Governance on Corporate Performance in the Health Care Sector

ID: 58448

Authors: Jessica Mendes De Luca, Alan Diógenes Góis, Márcia Martins Mendes De Luca, Jislene Trindade Medeiros.

Source: Revista de Administração Hospitalar e Inovação em Saúde, v. 16, n. 4, p. 63-83, October-December, 2019. 21 page(s).

Keyword: Corporate governance , Corporate performance , Corporate social responsibility

Document type: Article (Portuguese) Show Abstract

In this study we evaluated the effect of corporate social responsibility and corporate governance on corporate performance in the health care sector. Information on 453 public firms (1,825 observations) from the health care sector of 31 countries was retrieved from the platforms of Thomson Reuters Eikon and World Bank, covering the period 2010-2018, and submitted to quantile regression on panel data. Corporate social responsibility and corporate governance were found to be positively correlated. Corporate social responsibility practices and corporate governance had a positive effect on market value (Tobin’s Q) but a negative effect on corporate operating performance (Return On Assets). In other words, the legitimacy acquired through environmental, social and corporate governance practices benefited firms only from the perspective of value creation. Considering the substantial social and economic importance of the sector, health care organizations looking to remain on the market should invest in improvements or implement corporate social responsibility and corporate governance practices.