The investment led to different point of view regarding to the impact. By concluding contrary surveys over corporate ethics and business consequences, Paine (2003) concluded that "whether or not investors themselves [were] are directly concerned about corporate conduct, they recognize[d] that others' concerns can translate into financial consequences for the companies they invest in". However, the dominant theory which influenced the arguments heavily was agency logic: "the social responsibility of the firm is to increase its profits" (Friedman, 1970). Friedman's arguments on companies' responsibility became authoritative over decades. Investors believe that CSR initiatives are more like "charitable giving" (Atkinson & Galaskiewicz,1988) rather than strategic business investment which seeks for higher return of interest. Importantly, Scholars in early 1990s thought CSR activities focus more on meeting expectations of stakeholders, such as consumers, media and government rather than companies shareholders. Moreover, they interpreted CSR as a transfer payment that destroys shareholders' equity (Ioannis Ioannou, George Serafeim, 2014) to stakeholders.
Sample Selection Issues.
In addition to the agency logic that influenced the formation of pessimistic correlations between CSR and CFP, Shahzad and Sharfman (2015) reported that when social-choice investment advisory (SIA) were trying to reveal the linkage between CSR and CFP, there was a sample selection bias as the inclusion of firms in the database may not be random. Those firms made decisions to improve their CSR performance when they had exogenous pressure placing on them. This approach may lead to an inaccurate on how CSR correlates with CFP, and at worst can drive contrary conclusions based on observations. Therefore, the pessimistic recommendation from shareholders to companies with higher CSR performance became prevalent at that period of time.
