HOW DO EMPLOYEE SALARY/BENEFITS AND CSR/ESG PERFORMANCE AFFECT EMPLOYEE PRODUCTIVITY AND FIRM PERFORMANCE-EVIDENCE FROM STEEL INDUSTRY LISTED FIRMS IN TAIWAN

Abstract

ABSTRACT Based on the data of 45 listed firms in the steel industry on the Taiwan Stock Exchange and the Taipei Exchange Market from 2000 to 2020, this study examines how employee’s salary/benefits and firm’s corporate social responsibility (CSR) performance affect employee productivity and firm performance. Employee salary/benefits is measured by the salary/benefits per employee, the ratio of salary/benefits to net sales, and the ratio of salary/benefits to net income. CSR is measured by social contribution value, social return on assets and social contribution value per share, current CSR performance, cumulative CSR performance and repeated CSR performance. Employee productivity is measured by net sales per employee, gross profit per employee, after tax net income per employee, and yearly change in market value of common equity per employee. Firm performance is measured by return on assets, return on equity, earnings per share, annualized gross stock return, annualized excess stock return, and Tobin's q. Through correlation analysis and multiple regression estimation, evidence shows that larger employees salaries/benefits and better CSR performance are associated with superior performance on employee productivity and firm performance. Additional tests through various dimensions on CSR performance and ESG ratings show similar outcomes. Keywords Employee Salary/Benefits, CSR, ESG, Employee Productivity, Firm Performance