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Corporate social responsibility and firm performance: the role of firm reputation

Rizqa Anita (Department of Accounting, Universitas Lancang Kuning, Pekanbaru, Indonesia)
Muhammad Rasyid Abdillah (Department of Management, Universitas Lancang Kuning, Pekanbaru, Indonesia)
Putri Sevriyanti Sari S. (Department of Accounting, Universitas Lancang Kuning, Pekanbaru, Indonesia)
Sri Rizki (Department of Accounting, Universitas Lancang Kuning, Pekanbaru, Indonesia)
Windy Arlendhea (Department of Management, Universitas Lancang Kuning, Pekanbaru, Indonesia)

Journal of Global Responsibility

ISSN: 2041-2568

Article publication date: 27 November 2024

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Abstract

Purpose

This study aims to examine the role of firm reputation as a mediator in the relationship between corporate social responsibility and firm performance, along with the underlying mechanism.

Design/methodology/approach

This research is quantitative research that aims to explain the phenomenon of the relationship between the implementation of corporate social responsibility and firm performance. A total of 573 companies listed on the Indonesia Stock Exchange for the 2019–2021 period were sampled in this study. The analysis method in this study combines time series data and cross-section data called pooled data.

Findings

This research found a significant positive association between corporate social responsibility and firm reputation as well firm reputation is positively related to firm performance. In contrast, corporate social responsibility directly affects firm performance insignificantly. Based on the analyses, firm reputation mediates the effect of corporate social responsibility on firm performance.

Research limitations/implications

This study is limited due to its reliance on secondary data related to publicly listed companies from 2019 to 2021, which involves various downsides, that is many businesses still have not disclosed their engagement in corporate social responsibility practices. This study will ultimately yield practical implications for organizational managers, as it emphasizes the significance of corporate social responsibility in enhancing firm success.

Originality/value

The research presented in this paper contributes to the existing body of knowledge on corporate social responsibility by examining the impact of corporate social responsibility on firm performance. Furthermore, this study provides additional evidence for shared value creation by explaining the impact of corporate social responsibility on firm performance.

Keywords

Acknowledgements

The authors sincerely thank the reviewers and the editor for their constructive feedback and invaluable support in enhancing the quality of this manuscript.

Citation

Anita, R., Abdillah, M.R., Sari S., P.S., Rizki, S. and Arlendhea, W. (2024), "Corporate social responsibility and firm performance: the role of firm reputation", Journal of Global Responsibility, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JGR-11-2023-0181

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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