The Effects of Corporate Image and Corporate Responsibility on Financial Performance in Finland

Abstract

The effects of corporate image and corporate responsibility have been studied extensively in academic literature but the results have been mixed. The purpose of this paper is to examine whether corporate image and corporate responsibility have an effect on stock returns of companies operating in Finland. I also examine the relationship between corporate image and corporate responsibility on earnings per share (EPS) and price-to-book (P/B) ratios. My results suggest that corporate image and corporate responsibility do not have an effect on stock returns of companies operating in Finland. The results also suggest that growth companies, with higher price-to-book ratios, have higher corporate image and corporate responsibility values. On the other hand, value companies, or companies with low price-to-book values, seem to have lower corporate image and corporate responsibility values.