CSR and investment efficiency in Western European countries

The aim of this study is to examine: (i) whether investment efficiency is associated with CSR performance and (ii) whether this relationship varies with the strength of investor protection. Using firm level data from Western European countries, we document a positive association between CSR score and investment efficiency. We further find that the effect of CSR on investment efficiency is driven by the areas Human Ressources, Business Behavior, Corporate Governance, and Human Rights. Finally, we find that the documented association is statistically and economically more significant in countries with stronger investor protection.