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Does CSR committee drive the association between corporate social responsibility and firm performance? International evidence

Aamir Khan (Department of Management Sciences, Islamia College Peshawar, Peshawar, Pakistan)
Mustafa Afeef (Department of Management Sciences, Islamia College Peshawar, Peshawar, Pakistan)
Muhammad Ilyas (NUST Business School, National University of Sciences and Technology, Islamabad, Pakistan)
Shahid Jan (Department of Management Sciences, Islamia College Peshawar, Peshawar, Pakistan)

Managerial Finance

ISSN: 0307-4358

Article publication date: 20 April 2023

Issue publication date: 4 January 2024

540

Abstract

Purpose

Relying on the stakeholder view, this study investigates the role of CSR committee in moderating the association between CSR and firm performance (FP). Further, the authors examine whether country-specific governance and institutional factors drive the effect of CSR committee on the CSR-FP association.

Design/methodology/approach

The study's sample includes 4405 firms from 39 countries over the period 2002–2020. For analysis, ordinary least squares (OLS) regression with year and firm fixed effects is employed as the primary econometric model. Two-step generalized method of movement (GMM) is employed to address the endogeneity issues.

Findings

This study provides international evidence that the existence of a CSR committee enhances CSR's contribution to FP. Moreover, the benefits of CSR committees in terms of enhancing the positive impact of CSR on FP are significantly greater in strong governance countries and in environmentally less sensitive industries. The findings are further checked through endogeneity and robustness tests and remain unchanged.

Practical implications

CSR committee is a key governance mechanism that assists firms in generating value from their CSR activities. It strengthens a firm's relations with the stakeholders via an effective CSR channel, which translates into improved FP and long-term value.

Originality/value

The study is the first attempt to investigate the role of CSR committee, as a corporate governance mechanism, in explaining the relationship between CSR and FP in the international context. Further, the study also found that the role of CSR committee in enhancing CSR's outcomes largely depends on country-specific governance factors and the nature of industries.

Keywords

Citation

Khan, A., Afeef, M., Ilyas, M. and Jan, S. (2024), "Does CSR committee drive the association between corporate social responsibility and firm performance? International evidence", Managerial Finance, Vol. 50 No. 1, pp. 50-74. https://doi.org/10.1108/MF-10-2022-0508

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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