Corporate Social Responsibility Performance Research Articles

Research on the Impact of Corporate Social Responsibility Performance on Corporate Reputation and Employee Organizational Citizenship Behavior

Research on the Impact of Corporate Social Responsibility Performance on Corporate Reputation and Employee Organizational Citizenship Behavior

CSR Performance of Listed Firms: Booster to Nigerian Economy (2012-2021)

This paper examines the relationship between corporate social responsibility and financial performance of listed companies in Nigeria. The study used correlational research designs within positive accounting theory. The study utilized secondary data collected from the annual report and accounts of twenty-three (23) sampled listed companies for a period of 10 years (2012-2021). The sample of the companies was arrived at using census sampling technique in which all the elements of the population were used for the study. The data were analyzed using regression analysis (GLS Fixed Effect) with the aid of Stata Version 14.0. The study concludes that the involvement in CSR is also one way of meeting the requirement for good citizenship where a company is expected to be socially responsible to the environment in which it operates. The study therefore recommends, among others, that regulatory authorities such as SEC and NSE should improve on their monitoring and supervisory functions to make listed companies in Nigeria to comply strictly with the code of CSR.

When commitment isn’t enough: The cross-cultural interactive effects of commitment-inducement and compliance-enforcement on performance

The current study contributes to the ongoing discourse in the extant literature concerning the performance effects of the commitment-inducement and the compliance-enforcement approaches to the management of people and work. We expand on two research studies conducted in China to assess if the finding that commitment-inducement and compliance-enforcement result in higher organization financial and operational performance generalizes to corporate social responsibility performance and to countries and cultures across the globe. Using the current study’s large global multi-source sample, our findings illuminate that compliance-enforcement explained significant incremental variance in both organization financial and operational performance and organization corporate social responsibility performance beyond that of the commitment-inducement approach alone. Moreover, the highest levels of both performance outcomes were obtained by organizations that simultaneously used both commitment-inducement and compliance-enforcement; that is, hybrid governance. Compliance-enforcement was also found to have a more substantive relative effect on organization financial and operational performance while commitment-inducement was found to have a more substantive relative effect on organization corporate social responsibility performance. Furthermore, as hypothesized, at the between country-level, the relationship between the commitment-inducement approach of managing people and work and corporate social responsibility performance was found to be more negative both for a high individualism than a low individualism culture and for a high uncertainty avoidance than a low uncertainty avoidance culture, respectively. Whereas, the relationship between the compliance-enforcement approach and corporate social responsibility performance was found to be more positive for a high uncertainty avoidance than a low uncertainty avoidance culture. Finally, as hypothesized, at the between country-level, commitment-inducement and compliance-enforcement were found to be substitutes and have a negative synergistic effect on corporate social responsibility performance. Implications, limitations, and avenues for future research are discussed.

The Moderating Effect of Ownership Structure in Affecting CSR on Financial Performance

CSR activities are becoming a trend that companies do to be able to compete in increasingly fierce business competition. The company's consistency in carrying out CSR activities can have an influence on the profits generated by the company, which is shown by the company's financial performance. However, there are factors that can influence CSR on financial performance, one of which is ownership structure. The company's managerial ownership structure will have an impact on how well business decisions are made. The ownership identity applied by the company will support management decision making in implementing CSR efforts and improving financial performance. This study was conducted to examine the effect of ownership structure as a moderating variable on the relationship between corporate social responsibility and financial performance in companies located in Indonesia and Singapore. Furthermore, it was also tested by comparing CSR disclosures in the two countries by focusing on companies listed on the LQ45 index and the Straits Times Index. The test analysis uses panel data regression analysis and Mann-Whitney test to determine the level of difference in CSR in Indonesia and Singapore. The results obtained are that there is no significant difference in CSR in Indonesian and Singaporean companies. Furthermore, the role of ownership structure in strengthening the relationship between CSR and financial performance can be proven in Singapore companies, but cannot be proven in Indonesian companies.
 

Internal governance and corporate social responsibility performance

AbstractInternal governance is the process by which vice presidents (VPs) use their influence with the chief executive officer (CEO) to impact the firm's direction and policy. This study examines the effect of internal governance on corporate social responsibility (CSR) performance. Based on a large sample of US firms and after controlling for various CEO incentives, corporate governance and other determinants of CSR performance, we find that more effective internal governance is associated with a better CSR performance. These results are robust to alternative internal governance and CSR measures, alternative samples and various approaches that mitigate potential endogeneity problems. Further analysis shows that the effect of internal governance on CSR performance is more pronounced when (a) the CEO is subject to more intensive monitoring, (b) VPs are more powerful, (c) firms experience less short‐term financial performance pressure and (d) they face stronger product market competition. This study advances our understanding of corporate governance's effect on CSR by showing the importance of internal governance.

Board‐level governance and corporate social responsibility: A meta‐analytic review

AbstractBoard‐level corporate governance (CG) is an effective route to developing sustained ethical behavior, helping firms to meet emerging accountability challenges and international expectations of corporate performance. In recent times, researchers have extensively studied the relationships between various board‐level governance mechanisms and corporate social responsibility (CSR) outcomes; however, results vary substantially. This study addresses the existing heterogeneity in the literature by systematically synthesizing 89 empirical studies on the board governance‐CSR nexus using meta‐analyses using random effect models. Results indicate that most governance mechanisms are strongly associated with CSR disclosure. On the contrary, only a few governance mechanisms are found to be significantly associated with CSR performance, suggesting that not all governance mechanisms are equally effective for performance and disclosure. However, board size and the presence of CSR committee on board are the closest predictors of both CSR outcomes. Additionally, our analysis of the moderating effect of study characteristics shows that coverage period, geographical setting, and measurement of CSR generate variability in existing findings. Our synthesis of the extant literature identifies a theoretical gap, clarifies the board CG‐CSR relationship, and proposes future research directions and guidelines within the field.

The Impact of Corporate Social Responsibility and Corporate Governance on Firm Performance: A Study of ESG Quality 45 IDX-KEHATI

The KEHATI-listed companies have displayed commendable SRI performance across financial metrics and transactional liquidity. Among these firms, PT Danone Indonesia faced a Corporate Social Responsibility (CSR) issue in 2012 due to the uneven distribution of benefits, which prompted community protests and undermined the company's efficacy, ultimately impacting its performance. The overarching objective of this study is to explore and comprehend the relationship between CSR, corporate governance, and their potential impact on the performance of ESG QUALITY 45 IDX KEHATI listed on the Indonesia Stock Exchange (IDX). The study utilized panel regression analysis to analyze data collected over five years (2017-2021) from IDX. The research implies that there is no substantial relationship between corporate governance and performance. However, the findings evidence implies that there is a strong negative relationship between CSR and ROE, while ROA remains unaffected. In terms of control variables, the study found no significant correlation between firm size and ROA and ROE, while leverage had shown a substantial negative influence on both financial performance measures. This research sheds light on the connection between CSR, corporate governance, and business performance.

The role of management accounting on the relationship between corporate social responsibility and performance in SMEs

PurposeThis study aims to explore corporate social responsibility (CSR) implementation in small and medium-sized enterprises (SMEs) and examines the role of management accounting practices (MAPs) in the relationship between CSR and performance in SMEs.Design/methodology/approachA questionnaire survey was conducted among 1,000 SMEs in the southern region of Malaysia, and 203 valid replies were received.FindingsThe results indicate that most SMEs are informed about their social responsibilities across several CSR dimensions. There is evidence that supports the significant direct relationship between CSR and firm performance, and MAPs significantly and indirectly contribute to the effect of CSR on firm performance.Originality/valueThe findings contribute to an understanding of how the integration of CSR and MAPs can amplify the effect of CSR implementation on performance in SMEs. The finding may be useful for the relevant policymakers to increase socially responsible activities among SMEs to spur further growth for SMEs and society. SMEs may acknowledge MAPs as a significant intermediary in making CSR activities financially and operationally feasible.

How does Employee Education Affect Employer's Corporate Social Responsibility? Evidence from China

This paper explores how employee education affects the performance of Corporate Social Responsibility (CSR). By investigating 1,358 Chinese firms, we find that employee educations are positively associated with the quality of CSR reporting. Moreover, highly-educated employees have a stronger impact on the improved CSR reporting quality than other employees with lower educations. Further tests confirm these findings by including the external influences of state-owned regulations and mandatory disclosure requirements.

CORPORATE SOCIAL RESPONSIBILITY AND MARKET-BASED PERFORMANCE: EXPLORING BI-DIRECTIONAL RELATIONSHIP IN AN EMERGING ECONOMY

Corporate Social Responsibility (CSR) is a critical indicator for bridging corporately responsible behavior and stakeholder inclusion towards achieving long-term development. While stakeholder and reputation-building theories suggest that CSR can affect organizational performance, slack resource theory proposes organizational performance can affect CSR. Accordingly, it indicates that CSR initiatives and firm performance have a bidirectional relationship. Despite many unidirectional studies conducted to examine CSR and firm performance interplay in diverse contexts, studies on bidirectional analyses to test contrasting theoretical standpoints in a single study are rare. However, examining the bi-directional role of CSR is crucial as it provides insights into using CSR as a strategic investment decision within the competitive organizational context. Therefore, this study aims to examine the relationship between CSR and market-based performance as a bidirectional study from an emerging country perspective. Study data was collected from the sustainability/CSR disclosures in annual reports published between 2011 and 2020 by the top hundred companies (identified based on market capitalization) listed on the Colombo Stock Exchange (CSE) in Sri Lanka using judgmental sampling. The CSR was measured using a weighted CSR score assessed based on a comprehensive CSR index with thirty sub-dimensions. Market-based performance was measured using earnings per share (EPS) and firm value, and the control variables were firm size and leverage. The data was analyzed in two phases to examine the two-way linkage between CSR and market-based performance using the fixed effect panel regression technique. The findings concluded that CSR positively impacts market-based performance, confirming the role of CSR as a strategic driver to enhance future profitability. However, the study could not find any bidirectional impact of market-based performance on CSR in an emerging context. Although higher CSR affects higher external performance, higher market-based performance does not affect increased CSR in Sri Lanka. It may be because external performance indicators represent only the future profitability of firms, and these indicators are generally highly volatile over a long period, especially in emerging countries like Sri Lanka.

CSR and new product development performance in transition economies: roles of internal capabilities, external networks, and dysfunctional competition

ABSTRACT Despite abundant research on corporate social responsibility (CSR) outcomes, few studies have examined whether CSR contributes to new product development (NPD) performance. Existing studies argue that CSR increases firms’ innovation activities and launches more new products, however, these arguments have yet to fully extend to the understanding of underlying mechanisms in the CSR-NPD relationship and how CSR fosters NPD performance in different scenarios, especially in transition economies. Building on the resource-based view, social capital theory, and structuration theory, this paper hypothesizes that the CSR influence on NPD performance is mediated by internal capabilities and external networks and moderated by dysfunctional competition. Using empirical data of 219 small and medium-sized firms in China, we find that CSR not only directly increases firms’ NPD performance but also has positive effects on internal capabilities and external networks, which in turn improve NPD performance. Moreover, as one of the most representative institutional environments in transition economies, dysfunctional competition strengthens the effects of CSR on internal capabilities and external networks. This research contributes to the CSR and NPD literature in transition economies and offers strategic guidance to innovating firms in transition economies on how to foster and benefit from CSR initiatives, NPD managers should comprehend the coevolution of CSR, innovation, and institutional environments in transition economies.

Employing Machine Learning to Deduce a Causal Link Between Corporate Social Responsibility and Financial Performance

Incorporating Corporate Social Responsibility (CSR) into business strategy has become noteworthy, as that pertains to the discretionary initiatives a business entity undertakes to enhance its operational sphere’s societal and ecological circumstances. The evaluation of a company’s success is closely tied to its financial performance, which pertains to its capacity to produce earnings and enhance shareholder worth. The correlation between CSR and financial performance has been a topic of significant discourse, with numerous studies examining this subject from diverse perspectives. Nevertheless, establishing a causal association between the concepts above poses a formidable challenge, owing to the intricate nature of the association and the likelihood of extraneous variables exerting an effect. This study suggests a model for CSR based on Machine Learning (ML), referred to as the Machine Learning-based Corporate Social Responsibility Model (ML-CSRM). This model aims to establish a causal relationship between CSR and financial performance. The paper commences with a comprehensive exposition of CSR and its correlation with financial performance. The discourse delves into the intricacies of ascertaining the causal relationship between the two. The method under consideration utilizes Latent Dirichlet Allocation (LDA) and text clustering techniques to examine extant legal documents about CSR. The study presents the proposed method’s simulation results [Pearson’s Correlation Coefficient, precision, recall, Root-Mean-Squared Error (RMSE), and R-squared] and discusses the proposed approach’s outcomes. The outcomes of this research carry significant ramifications for both commercial enterprises and the broader community, given that they offer discernment into the correlation between CSR and economic outcomes.

Board of directors, COVID-19, and corporate social responsibility monetary performance: direct and interaction effects analysis

Purpose This study aims to provide archival evidence on the impact of board characteristics on corporate social responsibility (CSR) monetary performance and how they interact with the COVID-19 pandemic in the context of CSR monetary performance. Design/methodology/approach This study analyzes listed companies in Oman’s capital market from 2016 to 2021, using pooled ordinary least squares and unique CSR performance measures such as budgeting and spending. Findings The study finds that companies with more expertise and frequent meetings are more likely to allocate a larger budget for CSR activities. However, this does not apply to larger boards or to independent directors. During the COVID-19 pandemic, the effect of independent directors on CSR budgeting and spending is more pronounced, and boards with more expertise and meetings show a negative interaction with the pandemic. The interaction of board characteristics with COVID-19 in terms of CSR monetary performance varies depending on company size. Board independence and expertise show a significant reaction to COVID-19 infection and death cases when setting CSR budgeting and spending. Research limitations/implications The findings of this study are stimulating, but stem from an emerging country with unique cultural and institutional characteristics. Methodological issues were also encountered during the analysis, so readers should exercise caution when applying the results to other settings. Practical implications This study highlights board involvement in deciding a company’s CSR investment, as it was believed that chief executive officers are considered responsible for CSR activities. Additionally, this research underscores the significance of incorporating the financial aspects of CSR into reporting. Originality/value This study examines the seldom explored relationship between corporate boards and CSR monetary aspects during regular and irregular times, offering theoretical and practical insights that benefit multiple stakeholders.

Corporate social responsibility performance and social reputation via corporate social responsibility awarding: is there a threshold effect?

PurposeThis study aims to examine the potential threshold effect in the association between corporate social responsibility (CSR) performance and social reputation.Design/methodology/approachThis study includes an international and cross-sector sample covering 41 countries, nine sectors and 45,395 firm-year observations. It applies a parabolic relationship, rather than linear regressions, between CSR engagement and social reputation via CSR awarding. This implies that CSR performance should increase until a certain point to gain a social reputation but then should decrease after reaching that threshold point considering limited financial resources.FindingsThe findings of country-industry-year fixed-effects logistic regressions confirm the threshold effect with an inverted U-shaped relationship between CSR and CSR awarding. More specifically, firms increase their environmental and social engagement until a certain point, and then they reduce it after reaching a social reputation. This finding is confirmed by three dimensions of the environmental pillar (i.e. resource use, emissions and eco-innovation) as well as four dimensions of the social pillar (i.e. workforce, human rights, community and product responsibility). The findings are robust to alternative samples, alternative methodology and endogeneity concerns.Practical implicationsThe findings of this study have implications for firms about the better allocation of available funds between CSR and operations. The findings could be particularly useful for CSR teams/committees of the firms who formulate CSR policies and how to mobilize firm resources for better social enhancement via environmental and social reputation.Originality/valueThis study examines deeper the nature of the association between CSR engagement and social reputation and considers the possibility of an inverted U-shaped relationship between them. The determination of a threshold effect suggests that CSR engagement increases social reputation, but once it reaches a certain point, social reputation will decrease owing to financial resource constraints.

Corporate social responsibility dimensions and stock price crash risk: Evidence from the management's self-interest perspective

This paper adopts the lens of management's self-interest motives to explore the potential influence of corporate social responsibility (CSR) and its distinct dimensions on the risk of stock price crashes. Our findings reveal that CSR performance can effectively reduce the likelihood of future stock price crashes. Notably, the principal source of this risk mitigation stems from the dimensions of environmental responsibility and stakeholder responsibility, while the dimension of social responsibility does not exhibit a statistically significant effect on this phenomenon. We further find undervalued companies are able to benefit more from CSR and its various dimensions in terms of crash risk mitigation. Finally, we adopt the difference-in-difference test to discern the underlying mechanisms. Our research highlights that CSR, particularly environmental responsibility and stakeholder responsibility, contributes to the reduction of inefficient investments, deters management from selling shares, and curbs online platform manipulation, ultimately leading to a decreased risk of stock price crashes.

Corporate Social Responsibility and Intellectual Capital and Their Influence on Annual Report Readability: A Literature Review

This research aims to determine the relationship between Corporate Social Responsibility (CSR) performance, Intellectual Capital, and the readability of annual reports as a key communication tool between companies and stakeholders. This research uses a qualitative literature review approach by analyzing several previous studies related to this topic. The results of the analysis show that companies that are actively involved in CSR practices and have strong Intellectual Capital tend to present annual reports with a higher level of readability. This optimal readability has a positive impact on the understanding of various stakeholders, including investors and creditors, which in turn can support better decision-making. The implication is that companies can utilize CSR practices and Intellectual Capital development as a strategy to increase the readability of their annual reports. Therefore, increasing transparency, readability and clear disclosure of information in annual reports can contribute positively to a company's reputation and support long-term business growth. Recommendations for companies involve paying attention to the regulatory and disclosure reform initiatives that regulators have implemented to ensure disclosure is effective and affordable for all stakeholders

Is Institutional Ownership Socially Responsible? Perspectives from Heterogeneity and Stability of Institutional Ownership

This study examines the relationship between institutional ownership and the corporate social responsibility (CSR) performance of companies in India. Referring to social market theory, the free cash flow theory of agency costs and the institutional theory of CSR, this study hypothesized a positive association between institutional ownership and CSR performance (CSP). It empirically tested the hypothesis on a sample of 814 firm-years from 2010 to 2019. The findings reveal a significantly positive association between institutional ownership persistence and CSP. The robustness of the findings is tested against the heterogeneity of institutional ownership, namely, domestic and foreign institutional ownership, with reference to the ‘hometown advantage hypothesis’ and ‘global investor hypothesis’. Domestic institutional ownership significantly impacts CSP in line with the ‘hometown advantage hypothesis’; meanwhile, the significant influence of foreign institutional ownership on CSR aligns with the ‘global investor hypothesis’.

Geographic location and corporate social responsibility: urban versus non-urban firms

ABSTRACT This paper examines whether and how firm headquarters location affects corporate social responsibility (CSR) performance. Utilizing a propensity-score matched sample, we find that comparing to their urban counterparts, non-urban firms are less likely to spend resources on CSR programmes while exhibit a similar degree of socially irresponsible behaviour, resulting in a lower overall CSR score. Further analysis indicates that the availability of financial resources, public monitoring, and social capital mediate the relationship between firm location and CSR performance. Our research adds to the debate on CSR impetus by lending support to the economic incentive of CSR engagement and provides evidence of the social impact of location of corporate headquarters.

Investor response to corporate social responsibility performance: The role of corporate social responsibility reports readability

This paper presents empirical evidence regarding the impact of corporate social responsibility (CSR) readability on investor responses to CSR performance. The findings suggest that higher CSR performance contributes to increased share returns and trading volume, and CSR readability amplifies this effect. Investors are optimistic about companies with easy‐to‐read CSR reports due to the strong association of CSR performance with financial performance. Companies with CSR activities should take steps to regulate and improve the readability of CSR reports.

CSR performance practices and COVID-19 – a qualitative study of SME owners in UAE

PurposeThe purpose of this paper is to examine the corporate social responsibility performance among small and medium enterprise (SME) owners in the United Arab Emirates (UAE) before and during COVID-19. This study shows insights into the barriers that could affect the CSR performance practices of UAE SMEs, and related implications are discussed in the study.Design/methodology/approachThis study used a longitudinal qualitative research design. The research comprised 30 interviews from 15 SME owners that were studied prior to and during the pandemic. The 15 interview participants are the sole owners of these SMEs and are Emirati citizens. They were identified through personal contacts and referrals.FindingsStudy findings show that there was a clear shift during the pandemic to place more focus on employees. CSR performance practices are dominated by strategies for caring for the environment and employees. During the pandemic, the priority was paying employees at least a portion of their salary despite financial hardships and ensuring their health and well-being. Prior to the crisis, the key barrier to the implementation of CSR performance practices was a lack of knowledge. During the pandemic, barriers identified included uncertainty and financial constraints. Furthermore, all the owners believe that big corporations should be more socially responsible and SMEs should be the recipients of CSR practices. Lastly, the owners expressed their belief in the values of transparency, integrity, commitment, efficiency and responsibility.Originality/valueThis study is a novel attempt to gain an in-depth understanding of CSR among SMEs in the UAE in the context of a pandemic. It looks specifically at the performance practices pursued by SME owners in the UAE before and during the COVID-19 crisis.