Abstract
This article empirically evaluates the impact of CSR behaviour on the financial indicators of 286 companies from Brazil, Russia, India, and China over six years from 2013 to 2018. Company information and CSR ratings were retrieved from the Bloomberg and RobetaSAM databases, and hypotheses were proposed based on a literature review. We constructedvarious analytical models that differ in dependent variables to better evaluate of distinct CSR metrics through different regression methods. Analyzed factors include: (1) the presence of women on the board; (2) the presence of a company in CSR ratings, and (3) various cultural aspects of the society where companies operate.
 Our results support the conclusions of related research in this field of study. Among other consequences, our analysis indicates that CSR significantly influences financial performance, although this is also contingent on external factors. A company’s presence in the CSR rating scale has a more substantial impact on profitability and market capitalization indicatorsthan the actual score itself. CSR information disclosure has some effect on ROA and ROE, and the presence of women in the board of Directors showed a slight positive effect on market capitalization. Further, a high level of ‘power distance’ (i.e. the ostensible alienation of the general citizenry from political authority sources) in the society where company operatesharms the relationship between the rating score and financial performance.
Highlights
Recent decades have seen a substantial rise in the popularity of corporate social responsibility (CSR) concept within both the business and scientific communities
+ui + εit where: ROA is the natural logarithm of return on assets; ROE is the natural logarithm of return on equity; Marketcap is the natural logarithm of market capitalisation; CSR_presence is the presence of a company in the sustainable development rating (1 – the company is presented in the rating, 0 – the company is not presented in the rating); CSR_score is the score of the sustainable development rating RobecoSAM; Total_assets is the natural logarithm of the total corporate assets; D/E ratio is debt to equity ratio; Growth_rate is the profit growth rate of the company; Diversity of board is the percentage of women on the board of directors; ui is unobservable individual effects; εit is residual disturbance
Our analysis showed that despite the limitations caused by volatility and imperfection of emerging markets, CSR influences corporate financial performance, which is in line with the results of such authors as Cho et al [10], Yan et al [15] and Peng [33]
Summary
Recent decades have seen a substantial rise in the popularity of corporate social responsibility (CSR) concept within both the business and scientific communities. There is an emphasis on the research contributing to company CSR reporting, CRS definition and connections with financial result [1] When it comes to decision-making, companies apply the principles of profit-maximisation and costs minimisation. It is necessary to implement social, environmental, and managerial strategies in the corporate management’s decision-making procedure This necessity applies especially to those companies operating in the economic sectors which most adversely affect the environment or form a certain public sentiment. The companies which operate in the above sectors and directly impact the environment and social medium, are not the only ones that preoccupy themselves with social responsibility This is because CSR can directly and indirectly contribute towards a company’s financial success. Investors perceive CSR as a positive signal from the company of a lower level of risk and a higher level of stability, not least because a socially responsible company has a lower probability of becoming a party to legal action [3]
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