Corporate Social Responsibility, Problems, Behaviour, and Change in Financial Firms

This work investigates the relational behavior of corporate social responsibility (CSR) and its effect on firms' financial distress (FD). The population of the study consists of all the non-financial firms presently listed in the equity market of Pakistan. The yearly data set of 213 non-financial companies is selected from 2005 to 2017 with total observations of 2769. The analysis of the study based on OLS regression, fixed effect, and random effect models. The study also uses the GMM technique to guard against potential problems of endogeneity and heteroskedasticity that arise from the use of panel data. Results indicate that higher investment in CSR leads to reduced/lower financial distress. It suggests that investment in CSR raises the reputation and creditworthiness of firms. Key findings are robust as confirmed by alternative proxies of financial distress. Overall findings advocate that CSR helps in reducing default risk or financial distress and creates a better corporate environment that ultimately improves organizations' economic outlook.

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The impact of corporate social responsibility on financial distress: empirical evidence

Social Responsibility Journal ◽

10.1108/srj-11-2020-0446 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Muhammad Farooq ◽

Amna Noor ◽

Shahzadah Fahad Qureshi

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Financial Distress ◽

Generalized Method Of Moments ◽

Z Score ◽

Content Type ◽

Financial Firms ◽

Corporate Social ◽

The Impact

Purpose The present study aims to explore the role of corporate social responsibility (CSR) on the likelihood of financial distress for a sample of 139 Pakistan Stock Exchange (PSX) listed firms throughout 2008–2019. Design/methodology/approach Panel logistic regression (PLR) and the dynamic generalized method of moments (GMM) estimator are used to examine the impact of CSR on financial distress. The investment in CSR measures through a multidimensional financial approach which comprises the sum of the contribution made by the company in the form of charitable donation, employees’ welfare and research and development, whereas the Altman Z-score and ZM-Score are used as an indicator of financial distress. The higher the Z-score lower will be the probability of financial distress, whereas the higher ZM score shows a greater probability of financial distress risk. Findings The authors find a significant negative impact of CSR on financial distress in both PLR and GMM models. This finding is consistent with the stakeholder view of CSR, as an investment in CSR not only aligns the interest between shareholders and stakeholders but also mitigates the risk of financial distress as well. Research limitations/implications Like other studies, the present study is not free from limitations. First, financial firms skipped from the sample, although literature witnesses a lot of studies highlight the financial firms' commitment to achieving CSR goals. Second, financial distress occurs in different stages, the authors fail to establish linkage CSR engagements at different stages of CSR. In the future, researchers can make a valuable addition by covering these missing links in present studies. Practical implications The findings of this study provide more insight to corporate managers and investors about the association between the quality of investment in CSR and the degree of financial distress, concerning Pakistani firms. Furthermore, this study contributes to the existing literature by adding new evidence from developing countries such as Pakistan which are helpful for regulatory bodies and policymakers in the formulation of long-term CSR strategies to manage financial distress. Originality/value The study extends the body of existing literature on CSR and the likelihood of financial distress in Pakistan. The results suggest that policymakers may pay special attention to the quality of CSR while predicting corporate financial distress.

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The Economic Consequences of the Loan Guarantees and Firm’s Performance: A Moderate Role of Corporate Social Responsibility

Global Business Review ◽

10.1177/09721509211039674 ◽

2021 ◽

pp. 097215092110396

Author(s):

Carlos Samuel Ramos Meza ◽

Sana Bashir ◽

Vipin Jain ◽

Shahab Aziz ◽

Syed Ali Raza Shah ◽

...

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Economic Consequences ◽

Data Set ◽

Financial Firms ◽

Loan Guarantee ◽

Loan Guarantees ◽

Corporate Social ◽

The Relationship

This study examines the causal relationship between loan guarantee and firm’s performance through a moderate role of corporate social responsibility (CSR). This study used 350 non-financial firms of China for data analysis. This study used annual panel data set from non-financial firms starting from 2009 to 2019. The findings show that a positive significant association exists among the relationship between loan guarantee and firm’s performance. Moreover, a moderate role of Corporate Social Responsibility also strengthens the relationship between the loan guarantee and firm’s performance. Furthermore, the logit regression results show that the loan guarantee, financial performances and CSR are negatively affecting the long-term zero-debts through all combinations. Also, the financial performances and loan guarantees are negatively influencing the constraints of firms in China, which shows that the financial performances and loan guarantee improvement of the firms lead to removing the constraints of firms in China.

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Corporate Social Responsibility Disclosures in Nigeria: A Study of Listed Financial and Non-Financial Firms

Journal of Management and Sustainability ◽

10.5539/jms.v2n1p160 ◽

2012 ◽

Vol 2 (1) ◽

Cited By ~ 13

Author(s):

Uwalomwa Uwuigbe ◽

Ben-Caleb Egbide

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Financial Firms ◽

Corporate Social

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An Insight into Determinants of Corporate Social Responsibility Decoupling: Evidence from Pakistan

NICE Research Journal ◽

10.51239/nrjss.v0i0.172 ◽

2020 ◽

pp. 27-48

Author(s):

Sana Malik ◽

Sumayya Chughtai ◽

Kausar Fiaz Khawaja

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Stock Exchange ◽

Time Frame ◽

Firm Reputation ◽

Advertising Intensity ◽

Financial Firms ◽

Resource Slack ◽

Corporate Social ◽

Insight Into

The study aims to examine what causes firms to engage in Corporate Social Responsibility (CSR) Decoupling. It also highlights the intensity of the firms to be involved in the decoupling of firms’ actual from claimed CSR practices. The study hypothesizes a significant association between CSR decoupling and its various antecedents. The documented antecedents are coercive isomorphism, monitoring mechanism, firm reputation, resource slack, and firm advertising intensity. Based on Institutional Theory and Stakeholder Theory, the present study accounts for the gap between firms’ actual CSR efforts and its professed CSR while also highlighting the factors and conditions under which firms overstate and misrepresent their CSR activities. The sample of the study includes 200 non-financial Pakistani firms listed on Pakistan Stock Exchange (PSX) with a time frame ranging from 2010 to 2018. The model under study is tested using common effects regression. The study findings reveal that non-financial firms operating in Pakistan are highly engaged in CSR decoupling. Also, coercive isomorphism, monitoring mechanisms, and firm reputation are significantly associated with CSR decoupling.

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PENGARUH CORPORATE SOCIAL RESPONSIBILITY DAN PERATAAN LABA TERHADAP RESPON INVESTOR DALAM SEKTOR KEUANGAN (Studi empiris pada perusahaan Sektor keuangan di BEI periode 2013-2015)

Media Ekonomi ◽

10.30595/medek.v17i2.2139 ◽

2017 ◽

Vol 17 (2) ◽

pp. 72

Author(s):

Tuti Juniarsih ◽

Wida Purwidianti

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Quantitative Research ◽

Stock Exchange ◽

Return On Assets ◽

Independent Variables ◽

Financial Firms ◽

Analysis Technique ◽

Equity Ratio ◽

Corporate Social

The Research aimed to test effect of corporate social responsibility and profit equalization on investor’s response. independent variables in this study were corporate social responsibility and profit equalization. Dependent variable of this study was investor’s response (Cummulative abnormal return). This study used four control variables, those were: return on assets (ROA), debt to equity ratio (DER), firm size (FSIZE), and market share (MSHARE). This study was a quantitative research. The object of this study were financial firms listed on Indonesia Stock Exchange (BEI), There were 102 samples in this study obtained by using purposive sampling. Data analysis technique used in this research were descriptive statistics test, classical assumption test, multiple regression analysis, and hypothesis testing. The analysis showed that corporate social responsibility gave negative and significant effect partially on CAR. Profit equalization gave positive and insignificant partially on CAR.

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