Employee Satisfaction, Corporate Social Responsibility and Financial Performance

Chu-Hsuan Chang,Hsiou-Wei Lin,Wei-Liang Wang,Wen-Hsien Tsai,Cheng-Tsu Huang

doi:10.3390/su13189996

Abstract

This study explores the extent to which employee turnover, a proxy variable to employee loyalty, helps mediate the relationship between Taiwanese firms’ corporate social responsibility (CSR) performance and financial outcome. The results show that a firm’s CSR performance is negatively correlated with employee turnover and turnover variability, and moreover, employee turnover is negatively correlated with a firm’s financial performance. The result is especially noteworthy for studies regarding Taiwanese companies since quite a few of them are original equipment manufacturers (hereafter also referred to as OEMs), of intermediate goods. For the sample firms, although the contribution of social responsibility appears to have insignificantly direct benefit on financial performance, we document that the extent to which CSR conducts influence on long-term financial outcomes may be moderated and mediated by employee enthusiasm.

Highlights

This study applies a mediation model and conducts regression analysis of the companies that received the “Corporate Citizenship Award,” which has been presented by CommonWealth Magazine since 2007, as a corporate social responsibility (CSR) indicator.In the 21st century, there has been growing and substantial efforts exerted by the companies on corporate social responsibility issues for either a competitive strategy or out of charity
The prior literature does not clarify whether and the extent to which certain mediation channels may affect the significance of the impact of CSR on the stakeholders on corporate financial performance
Extant literature focuses on the relationship between two variables, CSR and financial performance

Summary

Introduction

This study applies a mediation model and conducts regression analysis of the companies that received the “Corporate Citizenship Award,” which has been presented by CommonWealth Magazine since 2007, as a corporate social responsibility (CSR) indicator. In the 21st century, there has been growing and substantial efforts exerted by the companies on corporate social responsibility issues for either a competitive strategy or out of charity. Of the companies indicate that they incorporate more environmental, social, and governance issues into their core strategies than before. Some studies document a positive correlation between CSR and financial performance, the findings in prior research show somewhat mixed evidence on the relationship between CSR achievements and financial performance [1]. CSR is multifaceted and difficult to measure [2], and because of this, the relationship between CSR achievements and accounting-based financial outcomes remains uncertain [3]

Objectives

Results

Conclusion