Effects of Corporate Social Responsibility on Corporate Financial Performance: A Competitive-Action Perspective

2015 ◽  
Vol 44 (3) ◽  
pp. 1097-1118 ◽  
Author(s):  
Kwang-Ho Kim ◽  
MinChung Kim ◽  
Cuili Qian
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Corporate Financial Performance ◽  
Socially Responsible ◽  
Firm Financial Performance ◽  
Competitive Action ◽  
Using Data ◽  
Corporate Social ◽  
The Relationship

We attempt to provide a more nuanced view of the relationship between corporate social responsibility (CSR) and firm financial performance using a competitive-action perspective. We argue that competitive action should be considered as an important contingency that determines the effects of CSR activities on firm financial performance. Using data for 113 publicly listed U.S. firms in the software industry between 2000 and 2005, we found that socially responsible activities (positive CSR) enhance firm financial performance when the firm’s competitive-action level is high, whereas socially irresponsible activities (negative CSR) actually improve firm financial performance when the competitive-action level is low. By introducing competitive action as an important contingency, this study contributes to the literature on CSR and strategic management.

scholarly journals THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY (CSR) ON ISLAMIC BANKING PERFORMANCE IN MALAYSIA

2021 ◽  
Vol 3 (8) ◽  
pp. 01-15
Author(s):  
Nur Hanisah Razali ◽  
Nizam Jaafar ◽  
Ismail Ahmad
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Future Research ◽  
Socially Responsible ◽  
Firm Financial Performance ◽  
Effect Regression ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

Corporate Social Responsibility (CSR) activities can lead the company to gain better recognition from citizens and investors. CSR has become one of the added values for a company in increasing competition from global and domestic. However, there are some critics who contend that the CSR benefits surpass the actual cost and some also claim that for the company to be socially responsible is too expensive. Therefore, the objective of this study is to determine the relationship between Corporate Social Responsibility (CSR) impacts on the Islamic Banks' financial performance, specifically in Malaysia. This study used Fixed Effect Regression Model to achieve the objectives of this study. The independent variables used to determine CSR comprise of environment, community, and workplace and marketplace expenditure ratio. Meanwhile, to measure the financial bank performance that is the dependent variable, Return on Asset (ROA) is used in this study. Based on this model, the researcher concluded that CSR’s elements which are environment, community, and marketplace have significant impacts on banks financial performance. This is consistent with Stakeholder Theory which states that the firm financial performance is determined by external stakeholders. In order to enhance the study future research may segregate the focus of the study specifically on Islamic Bank or conventional banking. Future research may also conduct research on the different industries.

scholarly journals Impact of Companies’ Characteristics on the Relationship between Corporate Social Responsibility Disclosure and Corporate financial Performance - An Empirical Analysis

2021 ◽  
Vol 39 (7) ◽  
Author(s):  
Sayeed Zafar Qazi ◽  
Parvesh Kumar Aspal
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Empirical Support ◽  
Corporate Financial Performance ◽  
Economic Point ◽  
Corporate Social Responsibility Disclosure ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

Strategic managers are persistently accosting with the decision of switching the scared corporate resource for the community welfare to balance the shareholders’ and multiple stakeholders’ interests. Corporate houses are presumed to not only intensify the economic priorities of investors, but must also consider the community and environmental ramifications as well. Presently, corporations are in dilemma over whether investment in corporate social responsibility (CSR) initiatives will be a cost or gain from an economic point of view. For this purpose, the association between CSR disclosure and corporate financial performance has been empirically explored and also the company characteristic has been considered as a significant and interesting factor influencing the association between CSR and corporate financial performance. The prime objective of the present paper is to examine the impact of companies’ characteristics i.e., Age of company on the relationship between corporate social responsibility disclosure and corporate financial performance. Panel data regression statistical technique has been applied to investigate and analyze the relationship. The findings of the study reveal that companies CSR have significant influence on their financial performances.  But, on the other hand the company characteristic, age of the company has no significant impact on the corporate financial performance. The findings are found consistent with earlier studies, which validate the company’s venture in undertaking the CSR initiatives. The present study addresses theoretical as well as empirical support and inspiration for the corporations towards CSR initiatives.

scholarly journals Analisis Pengaruh Corporate Governance, Corporate Social Responsibility, dan Corporate Financial Performance terhadap Perusahaan Indeks Kompas100 (The Influence Analysis of Corporate Governance, Corporate Social Responsibility, and Corporate Financial Performance to Companies in Kompas100 Index)

2015 ◽  
Vol 5 (1) ◽  
pp. 74-85
Author(s):  
Annisa Putri Caesari ◽  
Abdul Kohar Irwanto ◽  
Muhammad Syamsun
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Structural Equation ◽  
Equation Modeling ◽  
Corporate Financial Performance ◽  
Operational Activities ◽  
Corporate Social ◽  
The Relationship

The main objective of a company in running its operational activities is to maximize profit. Apart from that, the company is also obliged to provide maximum contribution to the community. To accommodate the objectives and obligations, the company may apply a system called Corporate Governance (CG). The company can also implement Corporate Social Responsibility (CSR) as its significant step in contributing to the community. The implementation of CG and CSR is related because CSR is a consequence of CG implementation. In addition to CG and CSR are interconnected, CG and CSR are also interconnected with Corporate Financial Performance (CFP). Through the implementation of CG, the company can improve CFP. The relationship between CSR and CFP can be associated positively or negatively. The research was conducted on 100 companies listed in Kompas100 index to determine the influence of CG to CSR, influence of CG to CFP, influence CSR to CFP, and influence of CG to the CFP with CSR as a moderating variable. Structural equation modeling (SEM) analysis was used to determine the relationship of these three variables. The results showed that CG influenced positively to CSR, but influenced negatively to CFP. Likewise, CSR influenced negatively to CFP. Due to the negative influence of CG to CFP and CSR to CFP, CG also influenced negatively to the CFP through the disclosure of CSR as moderating variable.Keyword: corporate governance, corporate social responsibility, corporate financial performance, Indeks Kompas100

How does corporate social responsibility influence firm financial performance?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sourour Ben Saad ◽  
Lotfi Belkacem
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Capital Structure ◽  
Financial Performance ◽  
Content Type ◽  
Firm Financial Performance ◽  
Structure Channel ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Relationship

Purpose This paper has three main purposes. First, this paper aims to study the effect of corporate social responsibility (CSR) on firm financial performance. Second, this study aims to examine how mandatory CSR disclosure impacts financial performance. Further, this paper aims to investigate the intervening role of capital structure decisions on the relationship between CSR and financial performance. Design/methodology/approach Based on a sample of French non-financial listed companies over the period 2006–2017, this study uses structural equations modeling and a difference-in-differences approach to highlight these effects. Findings This paper finds that CSR has a significant positive association with financial performance. In addition, although the mandate does not require firms to spend on CSR, the socially responsible firms experience an increase in profitability subsequent to the mandate. Finally, this study argues and finds evidence that the relationship between CSR and financial performance is mediated through the capital structure channel. Originality/value This paper contributes to the literature in several ways. First, the study provides a new research stream by examining the effect of mandatory CSR disclosure on firm financial performance. Second, is to knowledge the first to examine whether and how CSR affects financial performance through the capital structure channel.

scholarly journals The Relationship Between Corporate Social Responsibility and Corporate Financial Performance: A Moderating Effect of Economic Policy Uncertainty

2020 ◽  
Vol 11 (5) ◽  
pp. 304
Author(s):  
Van-Thi Dao ◽  
Manh-Trung Phung ◽  
Hongwei Cheng
Keyword(s):  
Economic Policy ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Corporate Financial Performance ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Relationship

Within recent decades, researches on corporate social responsibility (CSR) has been receiving more attention over the world. The existing literature on CSR is very diverse, both in evaluating the performance of CSR activities as well as and the relationship between CSR disclosure and firms’ outcome. This paper extends the literature of the latter case, that is, not only it aims to purely examine the relationship between CSR disclosure activities and corporate financial performance (CFP), but also consider this nexus under economic policy uncertainty (EPU) context. Our primary data is collected from more than 500 listed companies in the Vietnamese stock market from 2013 through 2017, while secondary data (CSR and EPU) are self-calculated under serial criteria. Our results support the hypothesis that the more companies intensively disclose CSR, the higher financial performance (both ROA and Tobin’s Q) they could obtain. More interestingly, we find that while EPU seems to weakly moderate the relationship between CSR disclosure and “internal financial performance” (ROA), it will significantly diminish the effect of CSR toward “external financial performance” (Tobin’s Q). The research shed light on an approach to measure CSR disclosure indexes for the emerging market as in Vietnam. Our findings encourage the firm’s managers to pay more attention to CSR disclosure activities due to the positive benefit that their firm could obtain and suggest policymakers to maintain a stable economic background for a sustainable market.

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.

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