The Impact of Corporate Social Responsibility on Cost Stickiness

Abstract: Purpose: This paper studies the impact of corporate social responsibility on cost stickiness, as well as showing additional evidence of stickiness among European firms. Methodology: OLS regression and fixed effects model. Theoretical perspectives: The theoretical part of the study describe cost behavior, cost stickiness and corporate social responsibility from a stakeholder perspective. Empirical foundation: The study is based on data from Thomson Reuters of the largest 600 European companies in the STOXX Europe 600 index between 2002 and 2020. Conclusions: SG&A (Selling, General & Administrative) cost stickiness is present among European firms, but firms with higher ESG ratings are associated with lower cost stickiness.