A cross-cultural longitudinal analysis of the effect of corporate social performance on corporate financial performance: an Asian perspective

Abstract

Purpose

This study aims to investigate the relationship between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP) across various cultural contexts in Asia and to explore the moderating effects of Hofstede’s cultural dimensions.

Design/methodology/approach

Using a longitudinal dataset of 16,392 firm-year observations from 23 Asian countries over a span of 10 years, from 2013 to 2022, this research uses hierarchical linear modeling to assess the CSP–CFP relationship under different cultural influences.

Findings

This study reveals a nuanced interplay between CSP, CFP and cultural dimensions, with individualism and uncertainty avoidance showing significant positive moderating effects, contrary to motivation and long-term orientation.

Research limitations/implications

The results underscore the importance of aligning CSR initiatives with the cultural values of the region in which a company operates. However, using Hofstede’s robust dimensions may oversimplify complex cultural dynamics.

Practical implications

The findings offer multinational corporations’ insights into tailoring CSR strategies to diverse cultural contexts, emphasizing the need for cultural sensitivity.

Originality/value

This research extends the corporate social responsibility (CSR) literature by incorporating cultural dimensions into the CSP–CFP analysis, providing a new perspective on CSR’s effectiveness in diverse cultural settings.

Citation

Almashayekhi, A. (2024), "A cross-cultural longitudinal analysis of the effect of corporate social performance on corporate financial performance: an Asian perspective", Journal of Asia Business Studies, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JABS-03-2024-0143