Corporate social responsibility, business group affiliation and shareholder wealth: evidence from an emerging market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Eswaran Velayutham ◽  
Vijayakumaran Ratnam
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Emerging Market ◽  
Business Group ◽  
Shareholder Wealth ◽  
Group Affiliation ◽  
Content Type ◽  
Business Group Affiliation ◽  
Corporate Social ◽  
The Relationship

Purpose This paper aims to examine the relationship between corporate social responsibility (CSR) and shareholder wealth arising from announcement returns of security issuance from a frontier market. It also explores the role of business group affiliation (BGA) on this relationship. Design/methodology/approach The study uses short-term scenarios to examine the link between CSR and shareholder wealth using the event study methodology which helps us mitigate the reverse causality problems related to studies of the relationship between CSR and firm value. Abnormal returns surrounding the security issue announcements were generated using the market model. Findings This paper finds that security issuers with high CSR scores are associated with higher shareholder value. However, this paper finds that CSR activities of security issuers with BGA are value-destroying which is consistent with the agency perspective of CSR. Research limitations/implications This study is limited to only one nascent market, namely the Colombo Stock Exchange. Originality/value This study documents that CSR and BGA are important determinants, among others, of stock price reactions to security offerings in emerging markets.

scholarly journals Business Group-Affiliation and Corporate Social Responsibility: Evidence from Listed Companies in China

2021 ◽  
Vol 13 (4) ◽  
pp. 2110
Author(s):  
Xin Huang ◽  
Xianling Jiang ◽  
Wei Liu ◽  
Qian Chen
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Emerging Market ◽  
Business Groups ◽  
Listed Companies ◽  
Business Group ◽  
Vital Role ◽  
Group Affiliation ◽  
Business Group Affiliation ◽  
Corporate Social

Business groups have played a vital role in the development of emerging markets. However, we share very limited understanding in the role of business group that act on affiliated firms’ CSR performance. Using manually sorted data on A-share listed companies and business groups in China from 2010–2017, we examine whether a company’s business group-affiliation affects its corporate social responsibility (CSR) performance and the mediating mechanisms of this association. Our empirical models show that group companies bear a higher level of social responsibility compared to independent companies. This positive relationship between group-affiliation and social responsibility relies on resource allocation through internal capital markets, rent-seeking initiatives, and consideration of corporate reputation. Moreover, group affiliation benefits the firm’s CSR performance in employee’s responsibilities, consumers’ responsibilities and environmental responsibilities, while significantly lower the shareholders’ responsibilities. Our empirical valuation of group companies’ CSR levels can serve as a benchmark for emerging market companies implementing social responsibility policies.

Corporate social responsibility and future financial performance

2018 ◽  
Vol 13 (3) ◽  
pp. 351-371 ◽  
Author(s):  
Mahdi Salehi ◽  
Mahmoud Lari DashtBayaz ◽  
Sohila Khorashadizadeh
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Emerging Market ◽  
Return On Assets ◽  
Content Type ◽  
Firm Financial Performance ◽  
The Future ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between corporate social responsibility (CSR) expenditures and firm financial performance in an emerging market. Design/methodology/approach The authors examine the hypotheses by performing panel data analysis on a sample of 159 companies listed on the Tehran Stock Exchange during 2010–2015. Findings The findings suggest that the investment in CSR initiatives is significantly and positively associated with firm financial performance as proxied by changes in return on assets. Moreover, the findings confirm a positive and significant association between CSR expenditures and firm financial performance as proxied by both the future changes in return on assets and the future changes in operating cash flows scaled by total assets. Originality/value The present study has examined the relationship between CSR and firm financial performance in a country where, to the authors’ knowledge as in most other developing markets, such a relationship has not been a subject of empirical research. Besides, the use of a three-dimensional measure of financial performance, primarily considering research undertaken in an emerging market, as a valuable contribution may be observed.

Multinational companies and the corporate social responsibility at home: the stakeholder approach

2019 ◽  
Vol 57 (9) ◽  
pp. 2383-2400
Author(s):  
Eun Woo Kim ◽  
Soonkyoo Choe ◽  
Jooyoung Kwak
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Multinational Corporations ◽  
Corporate Social Performance ◽  
Emerging Market ◽  
International Diversification ◽  
Truncated Regression ◽  
Content Type ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this paper is to integrate stakeholder and international business (IB) theories to explore the relationship between the international diversification of emerging-market multinational corporations (EMNCs) and corporate social performance (CSP) in their home markets. While the IB literature generally assumes a positive effect from international diversification on CSP as a result of global learning, the study aims at investigating the complicated effects in the link to the stakeholder theory. Design/methodology/approach This paper used combined sources of public survey data (corporate social responsibility (CSR) of the Korean firms) and archival data (foreign direct investment and corporate data). A truncated regression is used for statistical model. Findings International diversification helps MNCs to enhance CSP in their home countries. Thus, EMNCs can develop CSR capabilities at the global level, thereby benefiting domestic stakeholders. Also, significant investment in domestic research and development (R&D) and advertising negatively moderates the relationship between international diversification and domestic CSP. In this regard, expanding R&D and advertising facilitates global competitiveness. Moreover, as international diversification increases, EMNCs may redirect resources and re-orient CSR policies toward foreign stakeholders. Consequently, the relationship between international diversification and domestic CSP weaken. Practical implications Acceleration in international diversification may weaken domestic CSP, which arises from transformation into the global enterprises. Originality/value The study highlights the difficulties of EMNCs in serving domestic stakeholders effectively when their businesses are increasingly internationalized.

Corporate social responsibility, firm value and financial performance in Brazil

2011 ◽  
Vol 7 (2) ◽  
pp. 295-309 ◽  
Author(s):  
Vicente Lima Crisóstomo ◽  
Fátima de Souza Freire ◽  
Felipe Cortes de Vasconcellos
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Firm Value ◽  
Emerging Market ◽  
Financial Accounting ◽  
Content Type ◽  
Accounting Performance ◽  
Corporate Social ◽  
The Relationship

PurposeThe purpose of the paper is to examine the relationship between corporate social responsibility (CSR) and firm performance, taking into account firm value and financial accounting performance, in an emerging market – Brazil.Design/methodology/approachContent analysis was conducted to extract data from two different sources, one relative to CSR data and another that provided financial data. CSR indexes and financial performance measures were calculated to allow the estimation of regression analysis conducted to examine the relationship between CSR and performance.FindingsThe results indicate that CSR is value destroying in Brazil since a significant negative correlation between CSR and firm value was found. Additionally, a neutral relationship characterises the mutual effect between CSR and financial accounting performance.Originality/valueThe study has examined the relationship between CSR and firm performance in a country where, as in most other non‐developed markets, such a relationship has not been an object of research. Besides, the use of a three dimensional measure of CSR, mainly considering research undertaken in an emerging market, as a valuable contribution may be observed.

Corporate social responsibility, green innovation and competitiveness – causality in manufacturing

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Carmen Paola Padilla-Lozano ◽  
Pablo Collazzo
Keyword(s):  
Corporate Social Responsibility ◽  
Supply Chain ◽  
Social Responsibility ◽  
Emerging Market ◽  
Manufacturing Companies ◽  
Green Innovation ◽  
Firm Level ◽  
Content Type ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this paper is to explore the interplay of corporate social responsibility (CSR) and green innovation in boosting competitiveness in manufacturing in an emerging market context. This study adds green innovation as mediator in the relationship between CSR and competitiveness. Design/methodology/approach A model with three second-order constructs is developed and tested, in a sample of 325 managers from manufacturing companies in Ecuador, using quantitative and cross-section methods. Findings After obtaining adjusted and validated measurement models, a structural equation model was conducted, where the main hypotheses were confirmed, providing empirical evidence that CSR and green innovation significantly influence manufacturing competitiveness in a developing economy. Research limitations/implications This study considers only manufacturing companies in Ecuador, focusing on CSR practices in a single territorial case study. It arguably contributes to reinforce the business case for CSR, with new evidence on the causal relationships between CSR, green innovation and competitiveness, in the context of emerging market manufacturing industries. Although the literature often points at a positive relationship between CSR and firm-level competitiveness, supporting empirical evidence remains scarce. This model, introducing green innovation as mediator in the relationship between CSR and competitiveness in developing markets, accounts for a novel theoretical approach. Practical implications The findings are consistent with previous research, reporting the positive influence of CSR activities on organizational competitiveness, reducing risks and cost structures, as well as improving the relationship with employees, enhancing talent attraction, retention and productivity. Incorporating formal CSR tools to the model allowed us to highlight the relevance of ‘green’ certifications as a means to provide a competitive edge, along with increased bargaining power in the supply chain, resulting in competitiveness gains. The findings on the role of green innovation suggest a transition from cost-savings to a more strategic leverage on responsible innovation as a source of competitive advantage. Social implications Additionally, this research contributes to shed light on the impact of green processes and product innovations on social and environmental performance, providing evidence of a more efficient use of energy and natural resources, increasing productivity and by extension, profitability. CSR shapes an innovation culture that, through the use of social, environmental and sustainability controllers, can create new business models, products, services or processes that boost both firm-level and supply chain productivity, benefits that eventually spill over to the host community. Originality/value This study aims at bridging the research gap on the interplay of CSR, green innovation and competitiveness in manufacturing in an emerging market context.

Does institutional ownership and internationalization affect corporate social responsibility in emerging economy firms? An empirical evidence from India

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Manogna R.L. ◽  
Aswini Kumar Mishra
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Institutional Investors ◽  
Emerging Economy ◽  
Group Affiliation ◽  
International Investments ◽  
Content Type ◽  
Business Group Affiliation ◽  
Lending Institutions ◽  
Corporate Social

Purpose The preference of firm corporate social responsibility (CSR) spending is shaped by different groups of owners and the institutional environment in which the firm operates. This paper aims to study the heterogeneity among the controlling groups and firms’ internationalization in influencing the CSR decision in emerging economy firms. Design Methodology Approach This paper draws understanding from institutional theory to inspect the propensities of various ownership groups such as lending institutions (LI), domestic mutual funds (MF) and foreign institutional investors (FIIs). The empirical analysis was conducted from a sample of 1,594 unique Bombay stock exchange (BSE)-listed non-financial Indian firms during the 2014–2019 period using Tobit panel regression analysis. Findings The findings reveal that firms’ CSR activities are impacted differently by ownership share of different types of institutional investors after controlling for firm-level resources and capabilities. Lending institutions, FIIs and MF are supportive of CSR investments by firms along with international investments by the firm. Further, the results show that the CSR spend is positively influenced by the business group affiliation of the firm compared to the unaffiliated group of firms. Practical Implications The analysis has implications for both institutional investors and multinational firms. In the merging market context, managers and owners who target long term strategies such as CSR will benefit from increasing shareholdings of creditors (lending institutions). They can also take steps to improve their transparency and corporate governance structure so as to attract foreign institutional investments, thus, in turn, helping the internationalization process of the firm. Originality Value This paper considers the role of the diverseness of the ownership institutional investors along with the moderating effect of business group affiliation of the firm and international investments in impacting the CSR spend. This disparity has not been previously studied with the latest data in an emerging economy context.

From corporate social responsibility activities to financial performance: role of innovation and competitive advantage

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahnoor Zahid ◽  
Hina Naeem ◽  
Iqra Aftab ◽  
Sajawal Ali Mughal
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Competitive Advantage ◽  
Manufacturing Firms ◽  
Equation Modeling ◽  
Content Type ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this study is to scrutinize the effect of corporate social responsibility activities (CSRA) of the firm on its financial performance (FP) and analyze the mediating role of innovation and competitive advantage (CA) in the relationship between CSRA and FP in the manufacturing sector of an emerging country, i.e. Pakistan. Design/methodology/approach Data has been collected through an electronic structured questionnaire from 300 middle-level and top-level managers by surveying different manufacturing firms of Gujranwala, Pakistan. The study’s hypotheses have been checked by analyzing the reliability and validity of data and applying confirmatory factor analysis and structural equation modeling through statistical package for the social sciences and analysis of moment structures. Findings Outcomes of this study supported the hypothesized model. It has been found that the CSRA plays a significant positive role in determining the FP of the firm. Furthermore, the CA and innovation have been proved as significant mediators between CSRA and FP. Originality/value The first time examining the intermediation of innovation and CA in the relationship between CSRA and FP is the primary input of this study to the literature. Practically, this study’s findings will help strategy makers of manufacturing firms in emerging countries develop better strategies for implementing CSRA, enhancing innovation, seeking CA and improving FP.

Micro-loans and financial performance: a case of a Chinese commercial bank

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jasmine Alam ◽  
Mustapha Ibn Boamah ◽  
Yuheng Liu
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Design Methodology ◽  
Annual Reports ◽  
Content Type ◽  
Overall Performance ◽  
Corporate Social ◽  
Corporate Social Responsibility Reports ◽  
The Relationship

Purpose This study aims to investigate the relationship between a commercial bank’s micro-loaning activity and overall performance over a 10-year period. Design/methodology/approach Quarterly data was obtained from the Wind Database, China Minsheng Banks’s official annual reports and annual corporate social responsibility reports from 2009 to 2019, to test the linear relationship between micro-loan activities and the overall financial performance of the bank. Findings The results of this study empirically demonstrate that there is a positive relationship between increases in micro-loaning activity and the overall performance of the bank. Some key recommendations for the sector are shared in the conclusion of this paper. Originality/value In the financial sector, some corporate social responsibility activities focus on the issuance of micro-loans. It is unclear, however, if this has also served as a means to increase profitability and overall performance for such institutions.

Relationship between corporate social responsibility and tax avoidance: international evidence

2019 ◽  
Vol 15 (2) ◽  
pp. 244-257 ◽  
Author(s):  
Tao Zeng
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Tax Avoidance ◽  
Content Type ◽  
Tax Rate ◽  
Country Level ◽  
International Setting ◽  
Corporate Social ◽  
Statutory Tax Rate ◽  
The Relationship

Purpose This paper aims to examine the relationship between corporate social responsibility (CSR) and tax avoidance as well as how CSR and country-level governance interplay in affecting tax avoidance in an international setting. Design/methodology/approach This paper is an empirical work using listed companies from 35 countries and relying on several proxies for corporate tax avoidance activities including the difference between the statutory tax rate and the annual effective tax rate, the book-tax difference and the residual book-tax difference. Findings This study finds strong evidence that CSR is positively related to tax avoidance. It also finds that in countries with weak country-level governance, firms with higher CSR scores engage in less tax avoidance, implying that CSR and country-level governance are substitutes. Originality/value This paper is the first study that examines the relationship between CSR and tax avoidance in an international setting with different legal and institutional environment.

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