Abstract
To achieve sustainable business operations, corporate betting on the implementation of social responsibility has become a trend of global concern. Therefore, companies that pay attention to and invest many resources in corporate social responsibility (CSR) have gradually become critical strategies for business operations. This strategy has a substantial effect on business performance, especially regarding the financial impact. This study aims to explore the effect of CSR improvement on financial performance, return on assets (ROA), return on equity (ROE), size, debt ratio, and asset turnover on its interference. A total of 346 items of data from Taiwan companies that have won the “CommonWealth Corporate Citizenship Award” from 2012 to 2018 were analyzed via descriptive statistics and hierarchical regression methods to determine the influence and adjustment of various factors layer by layer. CSR, firm size, debt ratio, and asset turnover have a significant prediction on ROA. CSR, firm size, and turnover have a significant prediction on ROE. Firm size and debt ratio have a significant negative moderation effect on CSR to ROA. The debt ratio has a significant negative moderation effect on CSR to ROE. This study concludes that CSR has a significant impact on business performance. CSR affects ROA moderated by firm size and ROA and ROE moderated by debt ratio. This study puts forward practical and future research suggestions for the relevant units to promote CSR development.
Highlights
Social attention on corporate social responsibility (CSR) has gradually shifted from developed countries to developing countries in recent years
Conclusions is study concluded that CSR has a significant impact on business performance, and firm size and debt ratio have a moderating effect on CSR. e hierarchical regression analysis found that CSR and turnover positively and significantly impact return on assets (ROA), while the firm size and debt ratio have a negative and significant impact on ROA. is result shows that CSR is an essential factor that directly affects whether an enterprise makes full use of its assets
The hierarchical regression analysis found that CSR and turnover have a positive and significant impact on return on equity (ROE), while firm size has a negative and significant impact on ROE, and the debt ratio did not reach a significant predictive power on ROE. is result shows that turnover has the most significant influence; it is an essential factor that directly affects the company’s operating capacity and is essential for shareholders to measure whether it is worth continuing to invest
Summary
Social attention on corporate social responsibility (CSR) has gradually shifted from developed countries to developing countries in recent years. Society hopes that multinational companies and local companies will be required to incorporate CSR as the business philosophy and value of the company. Porter and Kramer argue that corporations and society’s mutual dependence implies that both business decisions and social policies must follow the principle of shared value, with choices benefiting both sides. Even though heightened corporate attention to CSR has not been entirely voluntary [1], the companies need to readjust their attitude towards CSR to improve their corporate image, gain reputation, and increase their profits. CSR has become an outstanding science, highly valued by academics, practical circles, and government units. Countries worldwide advocate the sustainable development goals (SDGs) as set by the United Nations at the 2015 Earth Summit Rio, Brazil
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