Abstract
The present research aims at investigating the impact of CSR on firm’s financial performance in Malaysia. Based on gaps in extant literature, the current study hypothesizes that four (4) independent variables comprising business risk, company reputation, employee engagement and stakeholder concern will exert statistically significant influences on the dependent variable, firm’s financial performance. The research employs a quantitative research approach whereby a sample 153 respondents were collected using a stratified random sampling technique. Employing SPSS software, multiple linear regression analysis was carried out. The results of multiple regression revealed that out of the four (4) hypotheses of the research, three (3) were supported whilst one (1) was not. In particular, it was shown that business risk, company reputation and stakeholder concern exert statistically significant influences on firm’s financial performance. However, there was no enough evidence to support the claim that employee engage can significantly influence firm’s financial performance. Several implications from the research were further discussed and elaborated.
Highlights
Corporate social responsibility (CSR) has been widely recognized by the society todays that all the organizations should hold a wider responsibility than short term profitability (Brammer & Millington, 2004; Idowu & Papasolomou, 2007)
The present research is guided by the following research questions (1) what is the effect of business risk on firm financial performance in Malaysia? (2) What is the effect of company reputation on firm financial performance in Malaysia? (3) What is the effect of employee engagement on firm financial performance in Malaysia? (4) What is the effect of stakeholders concern on firm financial performance in Malaysia?
This research was studied about the corporate social responsibility (CSR) which is one of the hot topic discussed and issue occurred in the society
Summary
Corporate social responsibility (CSR) has been widely recognized by the society todays that all the organizations should hold a wider responsibility than short term profitability (Brammer & Millington, 2004; Idowu & Papasolomou, 2007). CSR activities will prevent negative events from happening, they will influence firm’s financial performance such as sales growth and profitability. Implementation of CSR could bring impact to firms and firm’s financial performance. Nguyen & Nguyen (2015) has studied the impact of CSR on firm’s business risk by influencing and changing the working attitude and performances of the employees. According to Association of Chartered Certified Accountant Malaysia (ACCA), stated that Malaysian firms still lack little evidence of awareness of CSR even though 43 percent of the companies reported some extent on social performance and 26 percent promised to implement CSR activities in the future. The present research is guided by the following research questions (1) what is the effect of business risk on firm financial performance in Malaysia? Section one captures the introduction, section two discusses review of updated literature, section three (3) highlights the methodology employed in analyzing empirical data for this research, section four (4) discusses data collection and analysis whilst last but not least, section five (5) provides the conclusion and recommendations, as well as the contributions and limitations of the research
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