EFFECTS OF FIRM-SPECIFIC VARIABLES ON CORPORATE SOCIAL RESPONSIBILITY: AN EMPIRICAL STUDY

Abstract

Corporate Social Responsibility (CSR) is one of the pivotal determinants of promoting corporate brand and long-term reputation. Traditionally, firms operate to maximize profits and wealth for shareholders. Nowadays, they are constantly facing pressures from society and stakeholders to operate businesses in a socially responsible and environment-friendly manner while creating value for shareholders, stakeholders, and society. CSR is considered an important business strategy and a source of competitive advantage for many firms. There are ongoing debates about what drives corporate social responsibility. Historically, scholars and managers believed that CSR is a voluntary activity that firms pursue to optimize social welfare and protect the environment. Shareholders and stakeholders are more aware of firms’ activities to optimize wealth and social welfare which creates pressures on firms. Previous literature shows the effects of corporate governance, firm size, CEO gender, and legal systems on CSR practice. This study explores a significant research gap in measuring the relationships of firm-specific factors (e.g., disclosure quality, total investment, total revenue, R&D expenses, marketing and advertising expenses, and earnings per share) on CSR practice. The study conducted an empirical analysis based on 38 samples. The contribution of the study will facilitate researchers and policymakers to focus on important aspects that attribute firms’ potential for CSR practice.