A13 - Relation of Economics to Social ValuesReturn

This paper aims to assess the relationship between income and consumption expenditures of households in Romania between 1997 and 2022. The chosen econometric methods are the Augmented Dickey-Fuller and Phillip-Perron unit root tests, Granger causality tests and the Johansen-Juselius test. Our study highlights the fact that together with the increase in the monetary income, there was a considerable reduction in the income in kind that ensured the coverage of the consumption needs at the household level. Additionally, the increase in the population's monetary income is essential for reducing the share of expenses on the consumption of food products and increasing the consumption of non-food products and services.

This article analyses the relationship between corporate social performance and financial performance at the level of a panel of 62 Romanian companies listed on the Bucharest Stock Exchange. The first challenge was measuring of the social performance. A new social performance measurement system was developed based on which the CSP Index was obtained. The GRI criteria for reporting, the channel of communication chosen by the companies, as well as the level of detail of the published information were taken into account. The estimation of the regression model was made using the CSP Index as the dependent variable and the financial indicators (return on assets, return on equity, sales growth, average number of employees, total sales, market value added, PER index) as the independent variables. The panel regression analysis done to highlight the fixed or random effects at the company level indicated a relatively weak causal relationship between corporate social performance and financial performance. The social performance may also depend on other variables that are not included in the model, although, the general conclusion was that the social performance of Romanian companies is relatively low, but in an ascending evolution.

In this paper, we contribute to the literature focusing on ethics in banking from both theoretical and empirical point of view. We argue that the recent business of the global banking industry is not sustainable and we believe that ethical banking may represent one of the alternative models. In the empirical section, we investigate how ethics in the banking business models affects their financial performance. We identified 69 ethical banks and compared them with conventional banks using Bankscope data of more than 80,000 bank-year observations for the 2003-2013 period. We apply the Within-Between estimation method to bank financial indicators of Return on Assets, Return on Equity and their respective volatilities. We conclude that ethical banks report significantly lower volatility in Return on Equity than their conventional counterparts. In addition, the hypothesis that ethical banks would have higher profitability than their peers is not rejected.

The mutual fund industry has grown considerably in many countries since the 1990s. Its evolution has been explained primarily in terms of its economic and financial determinants. We draw on a dynamic set of measures for socio-cultural values to explain the differential development of mutual funds across the world. Using a sample of 38 countries for the period 1996-2009, we find a positive relation between the perception of happiness and the size of the mutual fund industry. Freedom of choice, a feature of countries that are dominated by individualistic behaviours and values, has a positive impact on the development of the industry. We also explain the positive relation between individuals' preference for private ownership and the development of mutual funds. Moreover, we prove that the industry is larger in developed countries with greater stock market liquidity, with low ratios of remittance inflows to GDP, and in which the industry is older.

The paper presents results of the research conducted in the area of CSR in the Czech Republic in 2013/2014. We focussed on small and medium-sized enterprises (SMEs). Correlation between the size of the enterprise, awareness, commitment and the number of used CSR activities is evaluated. The paper follows the involvement of SMEs in specific activities within the social, economic and environmental pillars and suggests possibilities for further development of the National Action Plan (NAP) for SMEs. The results of the statistical analysis show that engagement of organizations in the CSR activities growths with the size of the organization. Only 30% of micro and small enterprises in the Czech Republic know and make use of the CSR concept comprehensively and are active in all three pillars of CSR. Approximately 30% are involved in only one pillar - mostly in the economic one. 30% do not apply the CSR concept within their business at all. SMEs are not sufficiently engaged in activities primarily in the environmental pillar and activities aiming towards outside the organization.