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Article
Publication date: 9 November 2012

Li Sun

The purpose of this paper is to examine the association between corporate social responsibility (CSR) and financial performance.

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Abstract

Purpose

The purpose of this paper is to examine the association between corporate social responsibility (CSR) and financial performance.

Design/methodology/approach

This paper performs an empirical test on the association between CSR and financial performance of a firm.

Findings

The regression analysis reveals a significant and positive association between CSR and financial performance. In addition, it finds that the age of long‐term assets is highly correlated with CSR.

Originality/value

This paper extends Cochran and Wood by using a larger and more recent sample to examine the association between CSR and financial performance of a firm. It contributes to the CSR literature.

Details

International Journal of Law and Management, vol. 54 no. 6
Type: Research Article
ISSN: 1754-243X

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Article
Publication date: 30 November 2021

Asit Bhattacharyya and Mahbub Khan

Prior studies on corporate social responsibility (CSR) and performance have frequently used unidirectional, single-equation regression although the literature recommends…

Abstract

Purpose

Prior studies on corporate social responsibility (CSR) and performance have frequently used unidirectional, single-equation regression although the literature recommends the reciprocal association of CSR with firm performance. This paper aims to elucidate the interactive relationship of CSR spending with financial inclusion (FI) and firm performance. The study also explores the moderating impact of the level of FI on the CSR-firm performance relationship.

Design/methodology/approach

This study uses a simultaneous equations model to capture the FI, CSR and firm performance relationships and apply a three-stage regression approach and generalised method of moments approach to address possible endogeneity.

Findings

The results confirm a positive association of CSR spending with performance but a negative relationship of FI with performance. This paper also finds that FI negatively moderates the CSR spending-performance relationship.

Practical implications

The positive impact of CSR spending and the negative impact of FI on performance in mandatory CSR regimes provides valuable input in policy formulation. The results of the study will also be useful to national and international organisations, such as the International Monetary Fund and the World Bank.

Originality/value

This study uses a simultaneous equations model to capture the reciprocal association of CSR spending with firm performance, whereas prior studies on CSR and performance have frequently used unidirectional, single-equation regression. This paper also finds that FI negatively moderates the CSR spending- performance relationship. Including FI and exploring the moderating impact of the level of FI on the CSR-firm performance relationship is novel.

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Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 10 August 2021

Abir Hichri and Moez Ltifi

The study is based on a hybrid model composed of accounting and business data and is amongst the first to test the impact of corporate social responsibility (CSR

Abstract

Purpose

The study is based on a hybrid model composed of accounting and business data and is amongst the first to test the impact of corporate social responsibility (CSR) performance on the financial performance of the company, as well as the impact of financial performance on CSR performance. The bidirectional logic chosen by the study is rarely adopted in the global context and has never been tested in the Swedish context. Moreover, the purpose of this paper is to test the mediating effect of customer loyalty on the company’s CSR performance-financial performance relationship to assess this effect over the long term. This design has been neglected in previous studies.

Design/methodology/approach

Data was collected from a sample of 110 Swedish companies during the period 2009–2019. This study collects the data from the Thomson Reuters Eikon database. A multiple regression analysis was performed to test the hypotheses.

Findings

The results confirmed the bidirectional relationship between CSR performance and company financial performance. This means that CSR performance positively influences the company’s financial performance. Similarly, financial performance positively influences the company’s CSR performance. Moreover, customer loyalty has a positive and significant mediating effect on the company’s CSR performance-financial performance relationship.

Originality/value

This study adds several inputs. The first contribution of the research is to test a hybrid model composed of accounting and commercial data. This model is amongst the first to test the impact of CSR performance on the financial performance of the company and the impact of financial performance on CSR performance. The second contribution is the bidirectional logic chosen by the study which is rarely adopted in the global context and has never been tested in the Swedish context. The third contribution is to test the mediating effect of customer loyalty on the company’s CSR performance-financial performance relationship to assess this effect over the long term. This design has been neglected in previous studies. The fourth contribution is the choice of the field of investigation for the reliability of the data used and the generalisation of the results obtained.

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Corporate Governance: The International Journal of Business in Society, vol. 21 no. 7
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 3 August 2021

Anissa Dakhli

The purpose of this paper is to study how board attributes impact corporate social responsibility (CSR). In particular, this paper aims to empirically examine the impact…

Abstract

Purpose

The purpose of this paper is to study how board attributes impact corporate social responsibility (CSR). In particular, this paper aims to empirically examine the impact of financial performance on the relationship between board attributes and CSR. Board attributes such as board size, board independence, female board representation and CEO-chair duality are included.

Design/methodology/approach

This study uses panel data set of 200 French companies listed during 2007–2018 period. The direct and moderating effects were tested by using multiple regression technique.

Findings

The results indicate that significant direct relationships exist among board attributes and CSR. Board independence and female board representation are positively linked with CSR. However, board size and CEO duality are negatively associated with CSR. Findings show, also, that corporate financial performance accentuates significantly the effect of board size, board independence and CEO-duality on CSR, but does not moderate the relationship between female board representation and CSR.

Practical implications

The findings may be of interest to different stakeholders and policy-makers and regulatory bodies interested in enhancing CG initiatives to strengthen corporate social responsibility because it suggests thinking about implementing a broadly accepted framework of good CG practices to meet the demand for greater transparency and accountability. As an extension to this research, further study can examine the impact of ownership structure and audit quality on CSR issues.

Originality/value

This study extends the dynamic relationship between CG mechanisms and CSR by offering new evidence on how corporate financial moderates this relationship.

Details

Journal of Global Responsibility, vol. 12 no. 4
Type: Research Article
ISSN: 2041-2568

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Book part
Publication date: 10 September 2021

Lois S. Mahoney, Daniel R. Brickner and William LaGore

This research is one of the first studies to examine the effects of CSR disclosures on a firm’s decision to purchase back their own shares of stocks. Additionally, the…

Abstract

This research is one of the first studies to examine the effects of CSR disclosures on a firm’s decision to purchase back their own shares of stocks. Additionally, the authors examine whether the effect of CSR disclosures is stronger than the effect of CSR performance on the decision to repurchase shares. Examining firms in the United States, the authors find that total CSR disclosures and the CSR disclosures related to the dimensions of social, environmental, and governance are significantly and positively related to the number of shares that a firm buys back. Additionally, the authors find that the effects of CSR disclosures are stronger for total and the CSR dimensions of social and governance than for CSR performance. For the environmental dimension of CSR, both disclosure and performance scores are significant. This research expands our understanding of the impact of CSR disclosure by showing the importance it plays in the decision to buy back stock and implies that firms that repurchase their stock are more socially responsive than firms that do not. Finally, it contributes to the growing literature on how CSR disclosure has a different impact than CSR performance on firm decisions and outcomes.

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Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-80071-758-9

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Book part
Publication date: 16 October 2014

Robert W. Rutledge, Khondkar E. Karim, Mark Aleksanyan and Chenlong Wu

Research in the field of corporate social responsibility (CSR) has grown exponentially in the last few decades. Nevertheless, significant debate remains about the…

Abstract

Research in the field of corporate social responsibility (CSR) has grown exponentially in the last few decades. Nevertheless, significant debate remains about the relationship between CSR performance and corporate financial performance (CFP). This is particularly true for the case of Chinese state-owned enterprises (SOEs). The purpose of the current study is to empirically test the relationship between CSR and CFP. We use data for 66 Chinese SOEs listed on the Shanghai and Shenzhen stock exchanges. The results are interesting in that they are not consistent with similar studies using US and other Western market data. We find a significant negative relationship between CSR performance and CFP. The results are discussed in light of the preferential government treatment afforded to Chinese SOEs, and social welfare requirements imposed on such entities. Implications for Chinese policy-makers are discussed.

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Accounting for the Environment: More Talk and Little Progress
Type: Book
ISBN: 978-1-78190-303-2

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Book part
Publication date: 3 May 2018

Charles P. Cullinan, Lois S. Mahoney and Pamela B. Roush

We examine the perceived influence of externally generated firm ratings of corporate social responsibility (CSR) on voting for shareholder-sponsored CSR proposals. Using…

Abstract

We examine the perceived influence of externally generated firm ratings of corporate social responsibility (CSR) on voting for shareholder-sponsored CSR proposals. Using stakeholder and legitimacy theories, we introduce two rationales that relate shareholder voting decisions to the firm’s CSR performance: the complementary perspective where investors rely on management’s branding or image of the firm for CSR performance, and the sufficiency perspective where shareholders consider legitimacy effects of firm CSR performance. Our examination of 473 CSR shareholder-sponsored proposals during the 2013 to 2015 proxy seasons reveals a negative relationship between support for shareholder-sponsored CSR proposals and CSR strengths, particularly for social and environmental CSR strengths. We also find a positive relationship between support for shareholder-sponsored CSR proposals and CSR concerns, particular in the area of environmental CSR concerns. These results partially support the sufficiency perspective that incorporates shareholder legitimacy concerns. When companies have poor CSR performance, shareholders may view further CSR initiatives as beneficial to the firm.

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Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78754-973-9

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Article
Publication date: 17 May 2021

Mohamed Esmail Elmaghrabi

This study aims to explore the set of corporate social responsibility (CSR) committee attributes that may enhance CSR performance and CSR strategy formation and reduce CSR

Abstract

Purpose

This study aims to explore the set of corporate social responsibility (CSR) committee attributes that may enhance CSR performance and CSR strategy formation and reduce CSR controversies.[AQ1] Towards this end, the study also explores the differences between companies with and without CSR committees in terms of these three CSR performance facets.

Design/methodology/approach

The study uses a sample of financial times stock exchange (FTSE) 100 non-financial companies in 2015–2017. Kruskal-Wallis test is conducted to test the differences in CSR performance in firms with CSR board-level committee, CSR management committee and no committees. Additionally, a regression model is used to explore the attributes of CSR committees that lead to better/less CSR performance and CSR strategy/CSR controversies. A two-stage least squares regression model was used as a robustness check.

Findings

Firms with board CSR committee have better CSR performance and CSR strategy and lower CSR controversies than both firms with no CSR committees and firms with a CSR management committee. Regression results show that CSR committees that are predominantly consisting of independent board members, chaired by a female director and setting more meetings have better CSR performance. Additionally, CSR committees were found to have lower CSR controversies when having more independent directors and a chair with CSR expertise. CSR strategy was better with the CSR committee represented by a larger group of members.

Originality/value

This study makes several contributions to the sustainability governance literature and regulatory/guidance interfaces. There is extant literature examining audit committee attributes and their effects on various firm outcomes. The same can be said on the regulations of the audit committee. CSR committees’ composition and benefits are, by far, less regulated and largely under-researched. Hence, this paper is considered an early attempt to explore the CSR performance improvements a CSR committee may bring and the composition that would bring better CSR performance.

Details

Corporate Governance: The International Journal of Business in Society, vol. 21 no. 5
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 4 May 2021

Anura De Zoysa, Nobyuki Takaoka and Yuqian Zhang

This paper aims to examine the impact of three key factors — corporate social responsibility (CSR) awareness, CSR affordability and CSR management system (CSRMS…

Abstract

Purpose

This paper aims to examine the impact of three key factors — corporate social responsibility (CSR) awareness, CSR affordability and CSR management system (CSRMS) sophistication—on the CSR performance of Japanese firms.

Design/methodology/approach

Using responses to 36 items developed on the Global CSR standard of ISO26000, two CSR indexes were constructed to assess the CSR management system sophistication and performance of Japanese firms. The relationship between the three key variables (CSR awareness, affordability and management system sophistication) and CSR performance was then examined through a partial least squares (PLS)-based structural equation model. Data were collected through a questionnaire survey of 146 firms.

Findings

The results of the study found a positive relationship between CSR performance and three exogenous variables (CSR awareness, affordability and management system sophistication). Furthermore, the study found that CSRMS sophistication played a mediating role in the relationship between CSR performance and firms' CSR awareness and affordability.

Research limitations/implications

The study was limited to examining the CSR practices of a major province in Japan, which may hinder the generalisation of the findings to the rest of the country. Moreover, the data used for assessing the variables in this study were self-reported by the participating firms, in addition to being cross-sectional. The findings of this study clarified areas that policymakers, including Japan's business associations–Keidanren and Keizai Doyukai, and other relevant parties need to focus on for further improving CSR performances of Japanese firms.

Originality/value

This study highlights the role CSR awareness, affordability and CSRMS sophistication play in improving CSR performance. On the one hand, it identifies the critical role CSRMS plays in mediating the relationship among CSR performance, awareness and affordability. On the other hand, it advances CSR theory providing insight for practitioners to generate positive CSR outcomes.

Details

Industrial Management & Data Systems, vol. 121 no. 7
Type: Research Article
ISSN: 0263-5577

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Article
Publication date: 16 February 2021

Joanna Ho, Cody Lu and Lorenzo Lucianetti

This paper aims to examine whether and how two firm-level factors jointly moderate the relation between corporate social responsibility (CSR) activities and firm…

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2306

Abstract

Purpose

This paper aims to examine whether and how two firm-level factors jointly moderate the relation between corporate social responsibility (CSR) activities and firm performance: (1) the “alignment” between a firm's CSR activities and risk preferences and (2) performance measurement systems (PMS).

Design/methodology/approach

Using survey responses from top managers of private Italian companies and matching archival data on the financial performance of these companies, the authors show that the positive effect of CSR activities on firm performance is contingent upon CSR–risk alignment, which creates competitive advantages, and the extent to which the firm's PMS are supportive of its strategic initiatives.

Findings

The findings suggest that to extract economic benefits from CSR activities, firms must align CSR activities with their risk preferences and rely on PMS to overcome the causal ambiguity between CSR activities and competitive advantage.

Originality/value

Overall, this study contributes to both the CSR–firm performance and consequences of PMS literature and holds significant practical implications.

Details

Management Decision, vol. 59 no. 13
Type: Research Article
ISSN: 0025-1747

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