Abstract
Employees are an integral part of a company’s sustainable growth and they expect a safe working environment. Therefore, analyzing the factors that affect employee safety is important. In this context, we analyze the effect of corporate social responsibility investment on employee safety. Using Korean listed company data from 2012 to 2014, we regress corporate social responsibility scores on workplace injuries. The Ordinary Least Square (OLS) regression results show that higher corporate social responsibility scores are associated with fewer working days lost owing to workplace injuries. Moreover, while workplace injuries have a clear negative effect on firm value, corporate social responsibility activity significantly reduces this negative effect. Our findings imply that investment in corporate social responsibility can improve workplace safety and contribute to a company’s sustainable growth.
Highlights
The National Safety Council (NSC) reports that U.S employers paid approximately US$55.43 billion in 2019 in employee compensation costs due to workplace injuries [1]
We explore the effect of corporate social responsibility (CSR) on workplace safety using firm-level injury data from the Korea Occupational Safety and Health Agency, which operates under the aegis of the Ministry of Employment and Labor and collects workplace injury data and produces related statistics
Our empirical results show that the number of working days lost due to workplace injuries is negatively related to firm value, but this negative relationship is weak in companies with high CSR scores
Summary
The National Safety Council (NSC) reports that U.S employers paid approximately US$55.43 billion in 2019 in employee compensation costs due to workplace injuries [1]. Workplace injuries can erode a firm’s profitability and undermine its ability to recruit and retain employees [3]; employees desire a safe workplace, so employee safety is indispensable for a company’s sustainable growth. Workplace safety has been extensively studied in the field of management, but its relationship with corporate social responsibility (CSR) has not yet been explored. This study investigates whether socially responsible firms invest more in workplace safety, resulting in fewer working days lost due to workplace injuries. We examine whether the negative effect of workplace injuries on firm value is reduced by CSR activities. CSR is no longer considered to be a matter of choice; it is an integral part of corporate sustainable growth.
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