Corporate Social Responsibility and Sustainable Employability: Empirical Evidence from Korea

Abstract

A firm’s corporate social responsibility (CSR) aids in social well-being, but it is costly. It is thus necessary to study whether a firm’s CSR activities are valuable in terms of costs and benefits for shareholders’ interest. Recent studies reported that firms’ CSR activities help to develop the corporate environment and improve financial performance. In addition, prior studies explained that a firm’s CSR activities can have a positive effect on financial performance by increasing employees’ commitment to their firm. The purpose of this study research is to examine the effect of CSR activities on sustainable employability through empirical analysis. We measured the sustainable employability using the percentage of regular employees and then examined the effect of CSR activities on sustainable employability using 3802 firm-year data for Korean listed firms. From the empirical results, we found that firms engaging in CSR activities improve more in terms of sustainable employability than do firms who are not engaging in CSR activities. We also found that the companies engaging in a high CSR index score showed greater sustainable employability than did those with a low CSR index score. The results of this study suggested a way to increase sustainability in terms of employment by supporting a rational basis for companies to adopt CSR. These findings are expected to contribute to academia and the capital market by providing empirical evidence that a company’s CSR activities have a positive impact on sustainable employability.