Originality/value - The slack resources hypothesis has been the least researched of the two hypotheses relating to the corporate social and financial performance (CSP and CFP) links.

Practical implications - The multidimensional nature of CSP, here proposed and confirmed by the exploratory models, indicates that each dimension of social performance may be impacted by the availability of funds different intensities and according to the instrumental view (assuming the virtuous circle is true), investment in each particular dimension may provide a different level of return to the firm. The results presented here indicate that part of Friedman's claims may be occurring in reality, so further investigation is needed before they are disregarded. Research limitations/implications - The current trend in social responsibility regards Friedman's arguments as old‐fashioned and assumes the instrumental stakeholder to be true. The results further confirm that slack resources are assigned to specific areas of involvement of CSP (product issues, community relations, environmental issues, employee relations and diversity of the work force), rather than to a unified conception of CSP. Findings - The results indicate that prior financial performance, measured as market value added, positively affects CSP. The literature review builds on the contradictions between the instrumental stakeholder theory and the slack‐resources hypothesis to argue that both concepts are not fully compatible.

Design/methodology/approach - The paper uses the technique of panel data in a sample of 624 American listed companies from 2001 to 2007.

Purpose - The purpose of the paper is to test the slack‐resources hypothesis in corporate social performance (CSP).

Slack value