Abstract
The relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) has been crucial in academia and business circles. Numerous construction firms have continued to internationalize construction business over time despite the influence of the COVID-19. The internationalization of construction business makes the CSR–CFP relationship more complicated than usual. Construction firms’ CSR fulfillment serves to engage in reliable relationships with stakeholders and consequently improve CFP. It can bring both benefits and costs to the firm, which suggests that the CSR–CFP relationship is non-linear. This study examines the impacts of CSR on the financial performance of construction firms. We took Chinese-listed construction companies as an example, and an inverted U-shaped curve relationship between CSR and CFP was eventually revealed. Further, the significant moderating role of the degree of corporate internationalization (DOI) in the CSR–CFP relationship is disclosed. The results show that matching a high DOI-high CSR and a low DOI-low CSR is more conducive to CFP promotion. Thus, this research makes contributions to the academic perception of the impacts of CSR and DOI on CFP and provides insights for CSR fulfillment in the international arena.
Highlights
The importance of corporate social responsibility (CSR) and its performance evaluation has been highlighted by both business and academic professionals over time [1]
The results obtained after the analysis show that a higher CSR level does not always have a better corporate financial performance (CFP) level, and the degree of corporate internationalization (DOI) weakens the inverted U-shaped relationship between
This study showed that greater CSR efforts do not necessarily improve the CFP, as excessive CSR efforts may be detrimental to CFP
Summary
The importance of corporate social responsibility (CSR) and its performance evaluation has been highlighted by both business and academic professionals over time [1]. Researchers have maintained enthusiasm regarding the relationship between CSR and corporate financial performance (CFP), the results are inconclusive and contradict each other. The fulfillment of CSR helps firms to strengthen their relationships with stakeholders and acquire resources to improve their financial performance [4]. CSR activities cause resource consumption and agency costs may have a negative impact on CFP [6,7]. In this case, recent studies have found a U-shaped relationship [8,9] or inverted U-shaped relationship [10,11] between CSR and CFP, which indicates that they may have a complex relationship
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