The corporate social and financial performance relationship: What's the ultimate determinant?

We propose a theory that hypothesizes the non-existence of a direct causal relationship between financial and corporate social performance and only an indirect one that relies exclusively on their mutual connection with a firm's intangible investment. We find empirical support for this contention making use of a unique international dataset that provides comparable information on a firm's responsibilities towards its stakeholders. Hence, managers may pursuit both objectives without using one as instrumental to achieve a good performance in the other dimension (social or financial). They only should care on managing efficiently a firm's intangible resources.