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nancial performance is not constant over time but shows the form of a 'U' or an 'inverted U'. The first theory can be explained by the fact that the company's implementation of a CSR program will increase the costs and lower its profits in the short run. This decrease in profits and therefore in financial performance of the company will however be reversed in the long run. The theory of the 'inverted U' on the other hand, beliefs in the existence of an optimum level of corporate social responsibility. Beyond this level being socially responsible will no longer be economically advantageous for a company. Several studies that do not differentiate between short and long run in determining a relationship between two variables, have classified results that indicated a 'U' or 'inverted U' form under positive cq negative relationship (consequently leading to a three-type instead of four-type classification).

Neutral relationship implies that there is an absence of association or relation between two variables. According to this outcome no correlation is found between CSR and financial performance, meaning that corporate social responsibility has no impact on the profitability of a corporation. A neutral relationship was found by McWilliams and Siegel (2000) who argue that a relationship between social and financial measures exists by chance since there are too many variables which influence the relationship. The neutral relationship is found when the regression model is properly specified and controlled for R&D expenditure. However, the measurement problems of CSR could also cover any linkage that exists.

On the whole, social and financial performance research seem to show the existence of a positive relationship, but recent research points at numerous biases and problems of previous work (e.g. Elsayed and Paton, 2005 or McWilliams and Siegel, 2000). By reviewing Griffin and Mahon (1997), the authors identified three key issues. The studies were all characterized by a clear focus on multi-industry samples, the multiple dimensions of financial performance and a shared need for multiple measures to assess corporate social performance. Other problems revealed by the literature regarding the link between social and financial performance are related to: model misspecification (endogeneity), omitted variables in the determinants of profitability and limited data (very small samples, old periods).

From the studies that have been reviewed more than 78% (40 studies) used a population that contained multiple industries. However, the use of multi-industry samples can have a big biased effect on the results as this approach does not distinguish between industries, assuming that all industries are equal and comparable. Yet every industry is unique in its own way, which creates a 'specialization' of social interests (Holmes, 1977). Therefore it is important to account for the specific context of each industry.

During the 25 years of research 80 different financial performance measures have been used. Over 70% of the measures were used only once. This absence in overlap makes it very difficult to draw any solid conclusions on the validity and reliability of these measures. However, these single financial performance measures can be divided in 2 categories: market-based measures and accounting-based measures (Van Beurden and Gössling, 2008). Examples of market-based measures are stock 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。