Effect Of Corporate Social Responsibility Research Articles

The effect of supplier CSR on customer–supplier relationship

The paper studies how corporate social responsibility (CSR) helps suppliers mitigate customer concentration risk. Using a sample of customer–supplier pairs of U.S. public firms, we find that suppliers with greater CSR performance have a stronger relationship with their major customers, in terms of higher sales and lower termination likelihood. Moreover, following disruptive events at major customers, suppliers with weak CSR performance experience sales loss, termination likelihood increase, and negative market reaction, while suppliers with strong CSR performance are largely immune from these adverse shocks. Finally, we show that the positive impact of supplier CSR on customer relationship is more pronounced when the supplier has less bargaining power in the relationship. Overall, our findings suggest that CSR can be employed by suppliers as a precautionary way to reduce customer concentration risk.

Corporate social responsibility and firm value: the role of enterprise risk management and corporate governance

Purpose Corporate social responsibility (CSR) has gained tremendous importance after several corporate scandals, financial crises and the rise of the hyper-competitive world. Firms must address multiple stakeholders’ interests to increase firm value. This study aims to investigate the effect of CSR on firm value. This study also examines the mediating role of enterprise risk management (ERM) and the moderating influence of corporate governance (CG) in this CSR-firm value relationship. Design/methodology/approach The sample of the study comprises 119 Pakistan Stock Exchange (PSX) listed firms and the study covers the period from 2010 to 2021. The corporate social responsibility performance has been quantified across five dimensions. These aspects are product, environment, employee relations, diversity and community. Four proxies i.e. strategy, operation, reporting and compliance, have been used to measure ERM. The governance quality of the sample companies was evaluated using the governance index, which included 29 governance provisions. The authors used the dynamic panel data technique (system-GMM) is used to achieve the objectives of the study. Furthermore, a firm’s engagement in CSR activities can also be measured through a multinational financial approach to check the robustness of the result. Findings Based on the regression analysis, the authors discovered that CSR was positively connected with firm value, validating the stakeholder view of CSR. Furthermore, following Baron and Kenny’s (1986) mediation technique, the findings confirm that ERM mediates this association. These results are robust by using the bootstrapping tests by Preacher and Hayes (2004). Furthermore, the result shows that corporate governance (CG) is positively connected with firm performance, and this relationship is strengthened in the presence of an effective governance system in the organization. Practical implications This study provides useful insights to regulators, investors and policymakers to consider CSR as a value-enhancing factor and encourage the development of enterprise risk management and compliance with CG mechanisms to improve firm value. Originality/value The presented analysis strengthens the existing CSR–firm value relationship by analyzing the mediating and moderating roles of ERM and CG, which have not yet been tested, particularly in the context of Pakistan.

Corporate social responsibility and innovation: understanding the role of intellectual capital

PurposeThis study examines the impact of corporate social responsibility (CSR) on innovation, considering the role of the three dimensions of intellectual capital (human capital, structural capital and relational capital). Specifically, the analysis explores the direct effect of CSR and intellectual capital on innovation, the effect of CSR on intellectual capital, and the mediating effect of intellectual capital on the relationship between CSR and innovation.Design/methodology/approachData were collected from a sample of 101 Tunisian firms operating in various industries. The conceptual model of direct and indirect effects was tested with partial least squares structural equation modelling (PLS-SEM) using SmartPLS 4 software.FindingsCSR is positively related to innovation, as well as all dimensions of intellectual capital. Structural capital is the only dimension of intellectual capital that has a significant effect on innovation. CSR affects innovation through its impact on structural capital.Originality/valueMost studies have examined the direct effect of CSR on innovation in firms in developed countries. In contrast, this research sheds light on the mediating role of intellectual capital in this relationship, underlining the specific role of human capital, relational capital and structural capital. In addition, the study focuses on a developing country, which thus differentiates it from previous studies.

Corporate Social Responsibility and Firm Performance: A Literature Review

Research Aims: This study explores the complex relationship between Corporate Social Responsibility (CSR) and company performance, focusing on how board composition, leadership, and cultural influences affect the efficacy of CSR initiatives.Design/methodology/approach: Using a literature review method.Research Findings: Independent directors on company boards positively influence CSR activities, which in turn enhance company value. These effects receive moderation from the resources available to the company and mediation through the CSR activities themselves. The research also highlights that leadership qualities such as integrity and stakeholder engagement significantly boost organizational performance by promoting responsible corporate culture. It further reveals that market-oriented cultures strengthen the positive impacts of CSR on performance, while adhocracy cultures have the opposite effect. Geographical variations emerge in the effectiveness of CSR, with significant impacts observed in regions like Argentina and Bolivia, unlike in Chile where CSR shows negligible effects. The study notes that while CSR typically improves operational performance, its impact on market valuation proves complex and hinges on strategic emphasis on value utilization over creation. Moreover, a company’s initial CSR reputation crucially impacts its financial performance, where positive reputations enhance and negative ones detract from company success.Theoretical Contribution/Originality: The findings advocate for aligning CSR with corporate strategy and culture to maximize its benefits on company performance.

Extreme Weather and Firm Market Value: Roles of Corporate Social Responsibility and Stock Analyst Attention

ABSTRACT The outbreak of extreme weather events is increasing in frequency for the last decade, resulting in tremendous human and industrial losses worldwide. Evaluating and managing the effects of such events are highly urgent matters for firms, but the literature on this topic is limited. In this study, the effects of extreme weather events on the stock market performance of firms were estimated to provide a foundation for exploring how to manage such effects. From the perspective of the shareholder view, the heterogeneous effect of corporate social responsibility (CSR) on stock performance associated with extreme weather events were examined. Data on natural disasters that were caused by six types of extreme weather and occurred between 2001 and 2021 in China were used to construct a database of 2,718 Chinese listed manufacturing firms and 23,529 observations regarding the potential effects by extreme weather events. An event analysis indicated that the extreme weather events bring an average of 0.97% drop in the stock performance of potentially affected firms for the month that the event starts and the next month. A subsequent cross-sectional analysis revealed that a high CSR level is associated with low market value during extreme weather events, while a high level of stock analyst attention alleviates the negative effect of CSR on the stock performance of extreme weather events. This study enriches the existing literature and offers practical insights for managers in the fields of CSR and operations management, highlighting the complex dynamics between CSR activities, analyst attention, and stock market performance during extreme weather events.

Mandatory CSR regime strips the competitive advantage: a comparative study of pre-post CSR mandate using the Bandwagon-bias effect theory

PurposeWith corporate social responsibility (CSR) becoming mandatory, several firms in India have been compelled into spending resources on CSR while their business strategy and processes were unprepared to take up CSR activities, effectively. In this light, the CSR relationship with other business functions would be altered. Using Thomson Reuters data from 2010 to 2018 (pre-mandate to post-mandate) this study aims to re-examine the relationship between CSR and financial performance.Design/methodology/approachThe current study is rooted in the bandwagon-bias effect theory and uses a long-term data (2010–2018) of Indian firms. It uses Refinitiv Thomson Reuters ESG rating to measure CSR and accounting measures for financial performance (FP) to make a pre-post analysis of the impact that mandatory CSR regime has had on firms performance. The study uses the weighted panel regression method.FindingsThe relationship between CSR and FP is different when CSR was voluntary than when it has been mandated by Law. CSR has a positive effect over the FP during the voluntary phase but this positive relationship weakens during the mandatory phase. The waning effect of CSR over FP substantiates the presence of bandwagon bias effect which can be explained by the crowding-in of several companies engaged in CSR activities because of the mandatory CSR law.Research limitations/implicationsvFew countries have made CSR mandatory therefore CSR literature is limited. But mandating CSR is a growing phenomenon so this study augments to the body of knowledge. Until now literature generally converged on a positive relationship between CSR performance and FP but the current study shows altering directions to this relationship in a changing CSR environment. The use of the bandwagon-bias theory contributes to the theoretical approaches. Theoretically, the findings add to the body CSR literature and offer impetus to the evolving domain of impact measurement and reporting.Practical implicationsResults of the study offer a clear indication to managers that they need to re-strategise their CSR activities during the mandatory CSR environment if they wish to draw instrumental benefits of a positive impact on the FP of their firms. CSR expenditure is now a leveller so managers may either exceed the mandatory 2% expenditure as some firms did during the voluntary CSR phase or else design their CSR implementation plans to bring about a more impactful positive change. Communicating the impact of CSR to influential and powerful stakeholders beyond the mandatory reporting to the government is yet another way through which managers can draw benefits of CSR activities. Additionally to draw positive results from CSR activities firms may consider adopting international reporting and benchmarking standards such as the GRI and ISO 26000. Finally, the results of the study can be used by policymakers to make a note that the CSR law is causing a weakening of the financial benefits and therefore.Social implicationsThe results of the study can be used by policymakers also need to make a note that the CSR law is causing a weakening of the financial benefits and therefore firms are adopting shortcuts, by donating the required amount of funds. But donation of funds defeats the real purpose of mandatory CSR which is social impact, therefore the regulators may want to make the necessary changes unplug the gaps in the CSR law to ensure better adherence to the law in spirit and a real impact on the ground activities.Originality/valueWhile CSR–FP relationship has been extensively explored but limited studies have explored this relationship in a mandatory CSR environment and no other work presents a comparative view of the CSR–FP relationship, namely, before and after the mandatory CSR policy. The current study is one of the limited few studying the impact of mandatory CSR policy on FP, and the only one that uses the bandwagon-bias effect to explain the phenomenon of weakening impact of CSR on FP of firms. Bandwagon-bias effect has been used in studying consumer behaviour, where group effect impacts behaviour of individuals and with mandatory CSR policy, firms following the other firms leading to crowding in. Using the bandwagon-bias effect has found limited attention from the CSR scholars, the current study uses this theoretical basis and therefore augments the CSR literature.

The effect of financial pressure and corporate social responsibility on tax aggressiveness: The moderating effect of the audit committee

This research aims to examine the effect of financial pressure and corporate social responsibility (CSR) on tax aggressiveness. In addition, this research also investigates whether audit committee can moderate the effect of financial pressure and CSR on tax aggressiveness. In this research, the financial pressures include financial targets and external pressures. This quantitative research uses secondary data with the population of all manufacturing companies listed on the Indonesian Stock Exchange period 2019-2021. Sampling is conducted using purposive sampling technique involving 216 companies obtained during three years of observation. Data analysis is conducted using Smart PLS 3.0 with SEM-PLS application to test the direct and moderating effect. The results of this research show that financial target has a negative effect on tax aggressiveness, while external pressure has a positive effect on tax aggressiveness. CSR has no effect on tax aggressiveness. Audit committee cannot moderate the effect of financial target, external pressure, and CSR on tax aggressiveness. This research contributes to the development of accounting literacy, especially in the study of financial pressure, CSR, audit committee and tax aggressiveness. Measuring tax aggressiveness can be done using CETR by adding the CSR variable as an independent variable with GRI standards. In addition, this research also uses financial pressure variable from the fraud triangle theory which is related to tax aggressiveness.

The Interplay of Corporate Social Responsibility, Innovation Capability, Organizational Learning, and Sustainable Value Creation: Does Stakeholder Engagement Matter?

At the crossroads of innovation and responsibility, our study delves into CSR’s pivotal role in steering organizations toward sustainable value creation. Combining the frameworks of stakeholder theory, the resource-based view, and dynamic capabilities theory, this study examines the influence of corporate social responsibility (CSR) in enhancing sustainable value creation (SVC), with a keen focus on how organizational learning (OL) and innovation capability (IC) mediate this relationship and the degree to which stakeholder engagement (SE) moderates the impact of CSR on OL, IC, and SVC. Using a quantitative research approach, 416 managers in the Turkish manufacturing sector (e.g., textiles, building materials, and food processing firms) were surveyed using electronic and physical questionnaires. To test the research model, AMOS 24 was employed. The results confirmed that CSR positively influences SVC, OL, and IC; OL and IC positively influence SVC; OL and IC partially mediate the relationship between CSR and SVC. Likewise, the findings suggest that stakeholder engagement (SE) plays a moderate role in strengthening the relationship between CSR and organizational learning (OL), CSR and innovation capability (IC), and CSR and sustainable value creation (SVC), with increased SE enhancing the positive effect of CSR on OL, IC, and SVC. This study explains the complex ways that CSR enhances SVC, focusing on OL and IC’s mediating roles and SE’s moderating effects. It offers manufacturing sectors in Turkey useful information for promoting sustainability and innovation.

Csr In Emerging Markets: Challenges And Opportunities For Shell Companies

This article explores the challenges and opportunities of Corporate Social Responsibility (CSR) in emerging markets, focusing on a case study of a Shell company. Emerging markets present unique dynamics that affect the implementation and effectiveness of CSR. Shell, as one of the world's largest energy companies, has operated in various emerging markets and sought to implement effective CSR practices. Through an in-depth analysis of Shell's operations in these markets, this article identifies key factors that influence CSR success and provides recommendations for best practices. It finds that while there are significant challenges related to local regulations, infrastructure and culture, there are great opportunities to increase CSR impact through collaboration with local stakeholders, technological innovation and local capacity building. The article concludes that adaptation and flexibility are key for multinational companies like Shell to face the challenges and capitalize on the opportunities of CSR in emerging markets.

Corporate good deed and service failure: does being good lead to forgiveness?

ABSTRACT While Corporate Social Responsibility (CSR) has a positive influence on transactional outcomes following a service failure in the hospitality industry, little is known about its influence on consumer forgiveness, particularly relating to individual differences in subjective interpretations and perceptions. We investigate how different subjective interpretations (abstract and concrete mind-sets, i.e. construal level) and perceptions (i.e. warmth and competence) shape the effects of CSR on consumer forgiveness. Through three studies involving different service scenarios, we find that CSR effectively induces consumer forgiveness, with a stronger effect observed among those with an abstract mind-set (i.e. high-level construal) due to their warmth judgment. These findings underscore the importance of CSR in influencing consumer forgiveness and mitigating the negative outcomes of service failure, especially in situations where recovery with compensation is not feasible.

The economic impacts of social activism and corporate social responsibility on food fraud.

The study examines the relationship between the corporate social responsibility (CSR) investments of a food firm, an activist's incentive to target the firm to uncover and deter fraudulent behavior, and the firm's incentive to commit food fraud. Specifically, we develop a game theoretic model to analyze the strategic interaction between a food firm that decides whether to provide a credence food attribute and whether to misrepresent the quality of its product, and an activist who decides whether to monitor the firm and launch a campaign to uncover and remove false/misleading quality claims. We further examine the effect of CSR and the activist's presence on the level of quality the firm provides. We derive the conditions under which an activist will find it optimal to monitor the firm to uncover fraudulent quality claims and the firm will find it optimal to misrepresent its product quality. Analytical results show that the greater the firm's CSR investments, the less likely it is that the activist will find it optimal to monitor the firm, and the more likely it is that the firm will find it optimal to misrepresent its product quality. Results also show that the firm is more likely to misrepresent its product quality when its effectiveness in contesting the activist's campaign is relatively high, and more likely to actually provide a high-quality product when the cost of the credence attribute is relatively low.

Strategi Corporate Social Responsibility untuk Transformasi Bisnis dalam Membangun Masa Depan yang Berkelanjutan

In the era of globalization, companies not only focus on financial resources but also social and environmental aspects of their activities. Corporate Social Responsibility (CSR) is essential for companies to adapt and grow, foster relationships with stakeholders, mitigate risks, and create value for society. Interdisciplinary research is essential to understand the importance of CSR in business transformation. This research utilizes a qualitative descriptive research methodology. In CSR implementation, the presence of sustainable leaders is the presence of leaders who have a vision and mission can help companies in developing effective and sustainable CSR strategies. They can help companies in improving reputation and public trust, strengthening relationships with stakeholders, and opening new market opportunities. Stakeholder interest in CSR is an influence in improving CSR effectiveness and business transformation. They can increase community awareness and participation in development and empowerment efforts, and assist companies in improving effective and sustainable CSR strategies.

Exploring the impact of social responsibility on staff engagement in Ghanaian Universities:

Ghanaian universities have embraced a corporate identity and are actively participating in Corporate Social Responsibility (CSR), which is referred to as University Social Responsibility (USR). The purpose of this is to enhance the perception of identification (organisational identity) and promote employee involvement. This research examines the effect of University Social Responsibility (USR) on the level of involvement and commitment of staff members in Ghanaian institutions. It also proposes that the sense of identity plays a role in mediating the relationship between USR and staff engagement. This study utilised a cross-sectional survey methodology. The poll utilised a two-stage multi-stage sampling procedure to choose 412 participants. The survey utilised a validated questionnaire using a 5-point Likert scale. The questionnaire had a Cronbach's alpha coefficient (?) greater than 0.70. The data acquired from this questionnaire was customised for the survey. The data collected were configured and subjected to Structural Equation Modelling for analysis at a significance level of p<.05 using the SMART pls software. The findings indicate that identification perception does not significantly and directly predict the mediation effect of internal CSR on employee engagement (beta=0.008; t<1.96; p=0.439: p>0.05), and external CSR on employee engagement (beta=0.002; t<1.96; p=0.443: p>0.05) in the surveyed Ghanaian universities. The study concluded that the impression of identification did not operate as a mediator in the predicted association between the internal and external corporate social responsibility activities of the universities and employee engagement. According to the findings and conclusion, Ghanaian universities should take into account several elements and adopt a comprehensive approach when aiming to enhance employee job engagement. It is important not to exclusively concentrate on employee identification with the institution. It is advisable for the administration of Ghanaian institutions to develop efficient employee-focused engagement strategies and activities, both internally and externally, to boost the welfare of their workers, promote a sense of belonging, and improve overall performance.

The Impact of Corporate Social Responsibility on Financial Performance: A Comparative Study of Green and Non-Green Firms

This research compares green and non-green companies to investigate how corporate social responsibility (CSR) affects financial performance (FP). Although the relationship between CSR and FP has been studied in the past, the findings have been contradictory, and the conclusions can’t be reached with certainty because there isn’t enough specific data on CSR. The main goals of this study are to examine the relationship between corporate social responsibility (CSR) and financial success, as well as the possible effects of increasing media attention on CSR initiatives on business outcomes. The study intends to address important concerns about the advantages and results of CSR participation while acknowledging the variety of stakeholders engaged in assessing the business value of organizations. The study looks at the kinds of CSR activities that provide positive CSR effects and assesses whether CSR initiatives add to or subtract from profit maximization objectives. The study advances our knowledge of how corporate social responsibility (CSR) affects financial performance, especially when it comes to green versus non-green businesses. Keywords: Corporate social responsibility, financial performance, comparative study, green firms, non-green firms, stakeholders

Analysis of the Effects of Sharia Governance and Corporate Social Responsibility on Corporate Reputation and Financial Performance in Indonesian Sharia Multinational Companies

This study investigates the interplay between Sharia Governance, Corporate Social Responsibility (CSR), Corporate Reputation, and Financial Performance in Indonesian Sharia multinational companies. A quantitative approach using Structural Equation Modeling with Partial Least Squares (PLS) analysis is employed to analyze data collected from 200 employees within selected companies. The results indicate significant positive relationships between Sharia Governance and both Corporate Reputation and Financial Performance, as well as between CSR and these outcomes. Furthermore, Corporate Reputation partially mediates the effects of Sharia Governance and CSR on Financial Performance. The findings underscore the importance of ethical governance and socially responsible practices in enhancing organizational outcomes, offering practical insights for managers and policymakers in Indonesian Sharia multinational companies.

The Influence of Corporate Social Responsibility on Employee Performance with Organizational Commitment as Mediation

This research is to determine the effect of CSR on employee performance, CSR on organizational commitment, organizational commitment on employee performance, and is mediated by organizational commitment. The number of samples in this research is 210 samples, testing using the SEM test using the SEM-PLS analysis tool, the findings in this research There is that Corporate Social Responsibility (CSR) have a significant positive influence on Employee Performance. In addition, CSR also have a significant positive influence on Organizational Commitment. Organizational Commitment has a significant positive influence on Employee Performance. The latest findings show that Employee Performance has a significant positive influence, with Organizational Commitment as a mediating variable. the results about CSR showed that the lowest average scores were recorded on the assessment or evaluation indicators. To anticipate the spread of a similar response, companies need to identify the causes of this response. In the results of respondents, the lowest indicator of employee performance is the work quality indicator. Organizations must delve deeper into understanding the reasons behind the subpar quality of work observed within their operations. Within the spectrum of organizational Commitment, it is evident that the normative commitment indicator scores the least. Organizations need to cultivate a culture where employees feel intensely loyal. This can be done through employee development programs, appropriate incentives, and a supportive work environment.

The effect of CSR and corporate ethical behavior on implicit cost of equity: the mediating role of integrated reporting quality

Purpose The purpose of this study is to analyze the effect of corporate social responsibility (CSR) practices and corporate ethical behavior on implicit cost of equity (COE) using integrated reporting quality (IRQ) as a mediating variable in European companies belonging to the environmental, social and governance (ESG) index. Design/methodology/approach The authors use a panel data set of 540 European firms from the ESG index from 2013 to 2022. The data were collected from I/B/E/S and Thomson Reuters ASSET4 database and analyzed using the structural equation model to test hypotheses. Findings In the instance of ESG European firms, the findings indicate that CSR practices and corporate ethical behavior are negatively related to the COE. From the result of the Sobel test, this study indicated that IRQ has only indirect mediation on the relationship between CSR, ethical behavior of the company and implicit COE. Practical implications The findings have some policy and practical implications that may help regulators and managers in improving the COE and helping companies envision their future growth opportunities in a context where responsibility, ethics and disclosure are central to corporate valuation. Using the implicit COE is a better estimate of shareholder requirements in the context of ESG companies. Originality/value This research concentrates on ESG companies since they are more likely to contribute to environmental protection, which attracts responsible investors. Furthermore, the findings may be useful to worldwide managers and investors who use responsible practices as a criterion in their decision-making.

The Effect of Corporate Social Responsibility on Workplace Safety: The Significance of Employees' Moral Identity.

Corporate social responsibility (CSR) has gained significant attention from researchers and practitioners due to its potential impact on employee attitudes and behaviors. This study investigates the influence of CSR on employee safety behavior, examining the mediating effects of job stress and organizational identification, as well as the moderating role of moral identity. We conducted a three-wave time-lagged survey among 236 South Korean employees. Participants were recruited through a research company using stratified random sampling. Data were collected at three time points, each separated by a 4-5-week interval. Structural equation modeling (SEM) was used to test the hypothesized relationships. The findings support all of the hypothesized relationships. CSR was positively related to safety behavior and negatively related to job stress. Job stress was negatively related to organizational identification, which in turn was positively related to safety behavior. The sequential mediation of job stress and organizational identification was significant. Moral identity moderated the relationship between CSR and job stress, such that the negative effect of CSR on job stress was stronger for employees with a high moral identity. This study contributes to the CSR literature by examining the impact of CSR on safety behavior and the underlying mechanisms and boundary conditions of this relationship. The findings suggest that organizations can promote employee safety behavior by implementing CSR initiatives, which can reduce job stress and enhance organizational identification. Organizations should also consider the role of employees' moral identity when designing and communicating CSR initiatives.

Linking corporate social responsibility to organizational commitment: the role of employee job satisfaction

Purpose This study aims to examine the impact of an organization’s internal and external corporate social responsibility (CSR) initiatives on employee job satisfaction and organizational commitment. Design/methodology/approach Drawing on the social identity perspective, the authors proposed and tested a mediation model to understand the psychological mechanisms underlying the effects of CSR. The study sample comprised 263 employees from Italian manufacturing firms. Findings Our findings indicate that external CSR orientation is positively associated with employee job satisfaction and organizational commitment. Furthermore, the mediating effect of job satisfaction partially explains the positive relationship between external CSR orientation and organizational commitment. Moreover, we found that the positive impact of external CSR on employee outcomes is strengthened when combined with internal CSR. Practical implications This research has practical and theoretical implications for organizations seeking to enhance employee engagement and commitment through CSR initiatives and sheds light on how CSR can shape employee attitudes and behaviors toward the organization. Originality/value This study brings a novel contribution to the field by examining the impact of both internal and external CSR initiatives on employee job satisfaction and organizational commitment.

Corporate social responsibility and labor investment efficiency: evidence from China

PurposeWe expect to provide a complete theoretical framework and large sample evidence on the impact of corporate social responsibility (CSR) on the efficiency of labor investment. We also hope to provide micro-evidence based on labor investment behavior for the two-sided impact of corporate CSR behavior.Design/methodology/approachThis paper measures labor investment efficiency by estimating the difference between actual and expected net hiring of enterprises. CSR is measured on the basis of the CSR score of Chinese listed companies published by Hexun.com. A regression model is constructed to analyze the relationship between CSR and labor investment efficiency. Possible endogeneity problems are controlled by lagging independent variables, propensity score matching method and difference-in-difference method.FindingsResults show that CSR can improve labor investment efficiency by reducing over-hiring and under-hiring in emerging markets. The existence of the mediating effect of agency cost, information disclosure quality and employment fluctuation confirms that CSR improves labor investment efficiency through two mechanisms of corporate governance and labor market friction. The improvement effect of CSR on labor investment efficiency is more significant in non-state-owned, high CEO shareholding ratio and high-average urban wage enterprises.Originality/valueIn conclusion, our study is an important supplement to the existing research on the factors affecting labor investment efficiency. Our research conclusions will be helpful for enterprises in developing countries or enterprises in labor-intensive industries to improve labor investment inefficiency. The conclusion of the mechanism analysis in this paper provides more complete and reliable microscopic evidence for accurately identifying the specific path of CSR's impact on labor investment efficiency. This paper verifies the positive impact of CSR from the perspective of labor investment efficiency in the context of a developing country, which provides evidence for the theoretical conflicts related to CSR based on the effectiveness of enterprise labor investment decisions.