Performance implications of SA8000 certification
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Purpose. The aim of this paper is to shed light on the relationship between the adoption of SA8000 – which is considered the most important ethical certification standard – and firm performance, building on agency and contingency theories. Design/methodology/approach. We analyse secondary longitudinal balance sheet data of listed firms employing a rigorous event-study approach and compare SA8000 certified companies to different control groups based on three matching criteria, i.e., industry, size, and pre-certification performance. We then study the moderating effects of the cultural features, the country’s development level, and the labour intensity on the causal relationship through multiple regression methods. Findings. We find that SA8000 certification positively affects labour productivity and sales performance but has no effect on profitability. Furthermore, our study supports that the relationship between SA8000 and profitability is moderated by two cultural features of the home country of the firms (i.e., power distance and uncertainty avoidance). Originality/value. This is the first study, which empirically tests the effects of the ethical certification SA8000 on firm performance using a cross-country sample. In addition, we contribute to the wider debate on the effects of corporate social responsibility practices on firm performance.