csr and financial performance thesis

Information

• Author Services

Initiatives

You are accessing a machine-readable page. In order to be human-readable, please install an RSS reader.

All articles published by MDPI are made immediately available worldwide under an open access license. No special permission is required to reuse all or part of the article published by MDPI, including figures and tables. For articles published under an open access Creative Common CC BY license, any part of the article may be reused without permission provided that the original article is clearly cited. For more information, please refer to https://www.mdpi.com/openaccess .

Feature papers represent the most advanced research with significant potential for high impact in the field. A Feature Paper should be a substantial original Article that involves several techniques or approaches, provides an outlook for future research directions and describes possible research applications.

Feature papers are submitted upon individual invitation or recommendation by the scientific editors and must receive positive feedback from the reviewers.

Editor’s Choice articles are based on recommendations by the scientific editors of MDPI journals from around the world. Editors select a small number of articles recently published in the journal that they believe will be particularly interesting to readers, or important in the respective research area. The aim is to provide a snapshot of some of the most exciting work published in the various research areas of the journal.

Original Submission Date Received: .

• Active Journals
• Find a Journal
• Proceedings Series
• For Authors
• For Reviewers
• For Editors
• For Librarians
• For Publishers
• For Societies
• For Conference Organizers
• Open Access Policy
• Institutional Open Access Program
• Special Issues Guidelines
• Editorial Process
• Research and Publication Ethics
• Article Processing Charges
• Testimonials
• Preprints.org
• SciProfiles
• Encyclopedia

Article Menu

• Subscribe SciFeed
• Recommended Articles
• Google Scholar
• on Google Scholar
• Table of Contents

Find support for a specific problem in the support section of our website.

Please let us know what you think of our products and services.

Visit our dedicated information section to learn more about MDPI.

JSmol Viewer

The effect of corporate social responsibility on corporate performance in the food industry in saudi arabia: a partial least squares structural equation modeling approach.

1. Introduction

2. review of literature and hypothesis development, 2.1. csr and financial performance, 2.2. csr and competitive advantage, 2.3. csr and financial performance: the mediation role of innovation, 2.4. csr and competitive advantage: the mediation role of innovation, 2.5. csr and financial performance: the moderate role of competitive advantage, 3. methodology, 3.1. sample and data collection, 3.2. mathematical formulation of the model.

• - C S R : Corporate social responsibility;
• - I N N : Innovation;
• - C A : Competitive advantage;
• - F P : Financial performance.

3.3. Questionnaire Development

3.4. data analysis using pls-sem, 4. analysis and results, 4.1. common method bias, 4.2. assessment of the measurement model, 4.2.1. indicator reliability, 4.2.2. internal consistency reliability and convergent validity, 4.2.3. discriminant validity, 4.3. evaluation of the structural model, 4.3.1. assess collinearity issues within the model, 4.3.2. the significance and relevance of the model relationships, 4.3.3. examine the model’s explanatory power, 4.3.4. assess the model’s predictive power, 4.4. path analysis and hypotheses testing, 4.4.1. mediating effects, 4.4.2. moderating effect, 5. discussion of results, 6. conclusion remarks, author contributions, institutional review board statement, informed consent statement, data availability statement, acknowledgments, conflicts of interest.

• Carroll, A.B. Corporate social responsibility: Evolution of a definitional construct. Bus. Soc. 1999 , 38 , 268–295. [ Google Scholar ] [ CrossRef ]
• Freeman, R.E. Strategic Management: A Stakeholder Approach ; Cambridge University Press: Cambridge, UK, 2010. [ Google Scholar ]
• Bowen, H.R. Social Responsibilities of the Businessman ; University of Iowa Press: Iowa City, IA, USA, 2013. [ Google Scholar ]
• McWilliams, A.; Siegel, D. Corporate social responsibility: A theory of the firm perspective. Acad. Manag. Rev. 2001 , 26 , 117–127. [ Google Scholar ] [ CrossRef ]
• Javed, M.; Rashid, M.A.; Hussain, G.; Ali, H.Y. The effects of corporate social responsibility on corporate reputation and firm financial performance: Moderating role of responsible leadership. Corp. Soc. Responsib. Environ. Manag. 2020 , 27 , 1395–1409. [ Google Scholar ] [ CrossRef ]
• Saudi Vision 2030. Available online: https://www.vision2030.gov.sa/en (accessed on 15 July 2024).
• Hadj, T.; Omri, A.; Al-Tit, A. Mediation role of responsible innovation between CSR strategy and competitive advantage: Empirical evidence for the case of Saudi Arabia enterprises. Manag. Sci. Lett. 2020 , 10 , 747–762. [ Google Scholar ] [ CrossRef ]
• Abdou, A.H.; Hassan, T.H.; Salem, A.E. Promoting sustainable food practices in food service industry: An empirical investigation on Saudi Arabian restaurants. Sustainability 2023 , 15 , 12206. [ Google Scholar ] [ CrossRef ]
• Brin, P.; Nehme, M.N. Corporate social responsibility: Analysis of theories and models. EUREKA Soc. Humanit. 2019 , 5 , 22–30. [ Google Scholar ] [ CrossRef ]
• Lee, M.D.P. A review of the theories of corporate social responsibility: Its evolutionary path and the road ahead. Int. J. Manag. Rev. 2008 , 10 , 53–73. [ Google Scholar ] [ CrossRef ]
• Geva, A. Three models of corporate social responsibility: Interrelationships between theory, research, and practice. Bus. Soc. Rev. 2008 , 113 , 1–41. [ Google Scholar ] [ CrossRef ]
• Carroll, A.B. A three-dimensional conceptual model of corporate performance. Acad. Manag. Rev. 1979 , 4 , 497–505. [ Google Scholar ] [ CrossRef ]
• Elkington, J.; Rowlands, I.H. Cannibals with forks: The triple bottom line of 21st century business. Altern. J. 1999 , 25 , 42–43. [ Google Scholar ] [ CrossRef ]
• Carroll, A.B.; Brown, J.A. Corporate social responsibility: A review of current concepts, research, and issues. In Corporate Social Responsibility ; Emerald Publishing Limited: Leeds, UK, 2018; pp. 39–69. [ Google Scholar ]
• ISO 26000 ; International Guidance on Social Responsibility. ISO: Geneva, Switzerland, 2010.
• Schembera, S. Implementing corporate social responsibility: Empirical insights on the impact of the UN Global Compact on its business participants. Bus. Soc. 2018 , 57 , 783–825. [ Google Scholar ] [ CrossRef ]
• KsiężaK, P.; Szkolmowska, J. The Development of the CSR Concept and Theories. J. Corp. Responsib. Leadersh. 2018 , 5 , 27–46. [ Google Scholar ]
• Ma, C.; Chishti, M.F.; Durrani, M.K.; Bashir, R.; Safdar, S.; Hussain, R.T. The corporate social responsibility and its impact on financial performance: A case of developing countries. Sustainability 2023 , 15 , 3724. [ Google Scholar ] [ CrossRef ]
• Giannarakis, G.; Konteos, G.; Zafeiriou, E.; Partalidou, X. The impact of corporate social responsibility on financial performance. Invest. Manag. Financ. Innov. 2016 , 13 , 171–182. [ Google Scholar ] [ CrossRef ]
• Costa, J.; Fonseca, J.P. The impact of corporate social responsibility and innovative strategies on financial performance. Risks 2022 , 10 , 103. [ Google Scholar ] [ CrossRef ]
• Choongo, P. A longitudinal study of the impact of corporate social responsibility on firm performance in SMEs in Zambia. Sustainability 2017 , 9 , 1300. [ Google Scholar ] [ CrossRef ]
• Omidi, F.; Shafiee, M.M. The impact of corporate social responsibility on social performance, financial performance and customer reactions in the food industry. Int. J. Bus. Innov. Res. 2018 , 17 , 249–265. [ Google Scholar ] [ CrossRef ]
• Pinto, L. A qualitative analysis of corporate social responsibility in Saudi Arabia’s service sector-practices and company performance. Sustainability 2023 , 15 , 9284. [ Google Scholar ] [ CrossRef ]
• Alghizzawi, M.A.; Youssef, M.A.; Abu Zraiq, M.; Elmassri, M. The relationship between corporate social responsibility and firm performance: Evidence from Jordan. Cogent Bus. Manag. 2022 , 9 , 2088637. [ Google Scholar ] [ CrossRef ]
• Saeidi, S.P.; Sofian, S.; Saeidi, P.; Saeidi, S.P.; Saaeidi, S.A. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. J. Bus. Res. 2015 , 68 , 341–350. [ Google Scholar ] [ CrossRef ]
• Lin, C.H.; Yang, H.L.; Liou, D.Y. The impact of corporate social responsibility on financial performance: Evidence from business in Taiwan. Technol. Soc. 2009 , 31 , 56–63. [ Google Scholar ] [ CrossRef ]
• Hamdoun, M.; Achabou, M.A.; Dekhili, S. Could CSR improve the financial performance of developing countries’ firms? Analyses of mediating effect of intangible resources. Eur. Bus. Rev. 2022 , 34 , 41–61. [ Google Scholar ] [ CrossRef ]
• Hair, J.F., Jr.; Hult, G.T.M.; Ringle, C.M.; Sarstedt, M.; Danks, N.P.; Ray, S. Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R: A Workbook ; Springer Nature: Berlin/Heidelberg, Germany, 2021. [ Google Scholar ]
• Lee, E.M.; Lee, H.J.; Pae, J.H.; Park, S.Y. The important role of corporate social responsibility capabilities in improving sustainable competitive advantage. Soc. Responsib. J. 2016 , 12 , 642–653. [ Google Scholar ] [ CrossRef ]
• Calabrese, A.; Costa, R.; Menichini, T.; Rosati, F.; Sanfelice, G. Turning corporate social responsibility-driven opportunities in competitive advantages: A two-dimensional model. Knowl. Process. Manag. 2013 , 20 , 50–58. [ Google Scholar ] [ CrossRef ]
• Marakova, V.; Wolak-Tuzimek, A.; Tučková, Z. Corporate social responsibility as a source of competitive advantage in large enterprises. J. Compet. 2021 , 13 , 113–128. [ Google Scholar ] [ CrossRef ]
• Nyuur, R.B.; Ofori, D.F.; Amponsah, M.M. Corporate social responsibility and competitive advantage: A developing country perspective. Thunderbird Int. Bus. Rev. 2019 , 61 , 551–564. [ Google Scholar ] [ CrossRef ]
• Hakimi, I.; Zeinaddini, M.R.; Soltani Nejad, A. Studying the role of corporate social responsibility in corporate performance with emphasis on mediator variables of competitive advantage, corporate reputation and customer satisfaction (case study: Food industry of Amol Township). Int. J. Humanit. Cult. Stud. (IJHCS) 2016 , 3 , 2263–2278. [ Google Scholar ]
• Cegliński, P.; Wiśniewska, A. CSR as a source of competitive advantage: The case study of Polpharma group. J. Corp. Responsib. Leadersh. 2016 , 3 , 9–25. [ Google Scholar ] [ CrossRef ]
• Abubakar, A.; Belwal, S.; Mohammed, N.; Mohammed, U.D. Research Article Sustainable Competitive Advantage through Corporate Social Responsibility (CSR) and Green Behavior Strategies. Discret. Dyn. Nat. Soc. 2022 , 2022 , 551–564. [ Google Scholar ]
• Yan, R.; Li, X.; Zhu, X. The impact of corporate social responsibility on sustainable innovation: A case in China’s heavy pollution industry. Front. Psychol. 2022 , 13 , 946570. [ Google Scholar ] [ CrossRef ]
• Martínez-Falcó, J.; Marco-Lajara, B.; Zaragoza-Sáez, P.; Millán-Tudela, L.A. Analyzing the effect of Corporate Social Responsibility on Green Innovation Performance in the Spanish wine industry: A structural equation modeling analysis. Agribusiness 2023 , 39 , 985–1006. [ Google Scholar ] [ CrossRef ]
• Martinez-Conesa, I.; Soto-Acosta, P.; Palacios-Manzano, M. Corporate social responsibility and its effect on innovation and firm performance: An empirical research in SMEs. J. Clean. Prod. 2017 , 142 , 2374–2383. [ Google Scholar ] [ CrossRef ]
• Ratajczak, P.; Szutowski, D. Exploring the relationship between CSR and innovation. Sustain. Accounting, Manag. Policy J. 2016 , 7 , 295–318. [ Google Scholar ] [ CrossRef ]
• Homayoun, S.; Mashayekhi, B.; Jahangard, A.; Samavat, M.; Rezaee, Z. The controversial link between CSR and financial performance: The mediating role of green innovation. Sustainability 2023 , 15 , 10650. [ Google Scholar ] [ CrossRef ]
• Al-Shuaibi, K.M. A structural equation model of CSR and performance: Mediation by innovation and productivity. J. Mgmt. Sustain. 2016 , 6 , 139. [ Google Scholar ] [ CrossRef ]
• Wagner, M. Corporate social performance and innovation with high social benefits: A quantitative analysis. J. Bus. Ethics 2010 , 94 , 581–594. [ Google Scholar ] [ CrossRef ]
• Hull, C.E.; Rothenberg, S. Firm performance: The interactions of corporate social performance with innovation and industry differentiation. Strateg. Manag. J. 2008 , 29 , 781–789. [ Google Scholar ] [ CrossRef ]
• Bahta, D.; Yun, J.; Islam, M.R.; Ashfaq, M. Corporate social responsibility, innovation capability and firm performance: Evidence from SME. Soc. Responsib. J. 2021 , 17 , 840–860. [ Google Scholar ] [ CrossRef ]
• Bastič, M.; Mulej, M.; Zore, M. CSR and financial performance–linked by innovative activities. Naše Gospod./Our Econ. 2020 , 66 , 1–14. [ Google Scholar ] [ CrossRef ]
• Zahid, M.; Naeem, H.; Aftab, I.; Mughal, S.A. From corporate social responsibility activities to financial performance: Role of innovation and competitive advantage. Asia Pac. J. Innov. Entrep. 2021 , 15 , 2–13. [ Google Scholar ] [ CrossRef ]
• Bocquet, R.; Le Bas, C.; Mothe, C.; Poussing, N. Are firms with different CSR profiles equally innovative? Empirical analysis with survey data. Eur. Manag. J. 2013 , 31 , 642–654. [ Google Scholar ] [ CrossRef ]
• Bigliardi, B. The effect of innovation on financial performance: A research study involving SMEs. Innovation 2013 , 15 , 245–255. [ Google Scholar ] [ CrossRef ]
• De Oliveira, J.A.S.; Basso, L.F.C.; Kimura, H.; Sobreiro, V.A. Innovation and financial performance of companies doing business in Brazil. Int. J. Innov. Stud. 2018 , 2 , 153–164. [ Google Scholar ] [ CrossRef ]
• Padilla-Lozano, C.P.; Collazzo, P. Corporate social responsibility, green innovation and competitiveness–causality in manufacturing. Compet. Rev. Int. Bus. J. 2022 , 32 , 21–39. [ Google Scholar ] [ CrossRef ]
• Distanont, A. The role of innovation in creating a competitive advantage. Kasetsart J. Soc. Sci. 2020 , 41 , 15–21. [ Google Scholar ] [ CrossRef ]
• Vilanova, M.; Lozano, J.M.; Arenas, D. Exploring the nature of the relationship between CSR and competitiveness. J. Bus. Ethics 2009 , 87 , 57–69. [ Google Scholar ] [ CrossRef ]
• Zhao, Z.; Meng, F.; He, Y.; Gu, Z. The influence of corporate social responsibility on competitive advantage with multiple mediations from social capital and dynamic capabilities. Sustainability 2019 , 11 , 218. [ Google Scholar ] [ CrossRef ]
• Chang, C.H. The influence of corporate environmental ethics on competitive advantage: The mediation role of green innovation. J. Bus. Ethics 2011 , 104 , 361–370. [ Google Scholar ] [ CrossRef ]
• Gardner, R.G.; Harris, T.B.; Li, N.; Kirkman, B.L.; Mathieu, J.E. Understanding “it depends” in organizational research: A theory-based taxonomy, review, and future research agenda concerning interactive and quadratic relationships. Organ. Res. Methods 2017 , 20 , 610–638. [ Google Scholar ] [ CrossRef ]
• Wang, Q.; Dou, J.; Jia, S. A meta-analytic review of corporate social responsibility and corporate financial performance: The moderating effect of contextual factors. Bus. Soc. 2016 , 55 , 1083–1121. [ Google Scholar ] [ CrossRef ]
• Tang, Z.; Hull, C.E.; Rothenberg, S. How corporate social responsibility engagement strategy moderates the CSR–financial performance relationship. J. Manag. Stud. 2012 , 49 , 1274–1303. [ Google Scholar ] [ CrossRef ]
• Liu, Y.; Saleem, S.; Shabbir, R.; Shabbir, M.S.; Irshad, A.; Khan, S. The relationship between corporate social responsibility and financial performance: A moderate role of fintech technology. Environ. Sci. Pollut. Res. 2021 , 28 , 20174–20187. [ Google Scholar ] [ CrossRef ] [ PubMed ]
• Argaam. Saudi Arabia Unveils New Rules for Foreign Investment in Financial Institutions. 2024. Available online: https://www.argaam.com/en/article/articledetail/id/1613937 (accessed on 13 August 2024).
• Monsha’at. Definition of Small and Medium Enterprises (SMEs). 2024. Available online: https://monshaat.gov.sa/en/SMEs-definition (accessed on 13 August 2024).
• Becker, J.M.; Ringle, C.M.; Sarstedt, M. Estimating Moterating effects in PLS-SEM andPLSc-SEM: Interaction term gerneration* data treatment. J. Appl. Struct. Equ. Model. 2018 , 2 , 1–21. [ Google Scholar ]
• Henseler, J.; Chin, W.W. A comparison of approaches for the analysis of interaction effects between latent variables using partial least squares path modeling. Struct. Equ. Model. 2010 , 17 , 82–109. [ Google Scholar ] [ CrossRef ]
• Cohen, J. Statistical Power Analysis for the Behavioral Sciences ; Routledge: London, UK, 2013. [ Google Scholar ]
• Abbas, J.; Mahmood, S.; Ali, H.; Ali Raza, M.; Ali, G.; Aman, J.; Bano, S.; Nurunnabi, M. The effects of corporate social responsibility practices and environmental factors through a moderating role of social media marketing on sustainable performance of business firms. Sustainability 2019 , 11 , 3434. [ Google Scholar ] [ CrossRef ]
• Ali, W.; Danni, Y.; Latif, B.; Kouser, R.; Baqader, S. Corporate social responsibility and customer loyalty in food chains—Mediating role of customer satisfaction and corporate reputation. Sustainability 2021 , 13 , 8681. [ Google Scholar ] [ CrossRef ]
• Sarfraz, M.; Ozturk, I.; Yoo, S.; Raza, M.A.; Han, H. Toward a new understanding of environmental and financial performance through corporate social responsibility, green innovation, and sustainable development. Humanit. Soc. Sci. Commun. 2023 , 10 , 297. [ Google Scholar ] [ CrossRef ]
• Hair, J.F., Jr.; Sarstedt, M. Factors versus composites: Guidelines for choosing the right structural equation modeling method. Proj. Manag. J. 2019 , 50 , 619–624. [ Google Scholar ] [ CrossRef ]
• Gimeno-Arias, F.; Santos-Jaén, J.M.; Palacios-Manzano, M.; Garza-Sánchez, H.H. Using PLS-SEM to analyze the effect of CSR on corporate performance: The mediating role of human resources management and customer satisfaction. An empirical study in the Spanish food and beverage manufacturing sector. Mathematics 2021 , 9 , 2973. [ Google Scholar ] [ CrossRef ]
• Hair, J.F.; Risher, J.J.; Sarstedt, M.; Ringle, C.M. When to use and how to report the results of PLS-SEM. Eur. Bus. Rev. 2019 , 31 , 2–24. [ Google Scholar ] [ CrossRef ]
• Segarra-Moliner, J.R.; Moliner-Tena, M.Á. Customer equity and CLV in Spanish telecommunication services. J. Bus. Res. 2016 , 69 , 4694–4705. [ Google Scholar ] [ CrossRef ]
• Henseler, J.; Dijkstra, T.K.; Sarstedt, M.; Ringle, C.M.; Diamantopoulos, A.; Straub, D.W.; Ketchen, D.J., Jr.; Hair, J.F.; Hult, G.T.M.; Calantone, R.J. Common beliefs and reality about PLS: Comments on Rönkkö and Evermann (2013). Organ. Res. Methods 2014 , 17 , 182–209. [ Google Scholar ] [ CrossRef ]
• Podsakoff, P.M.; MacKenzie, S.B.; Lee, J.Y.; Podsakoff, N.P. Common method biases in behavioral research: A critical review of the literature and recommended remedies. J. Appl. Psychol. 2003 , 88 , 879–903. [ Google Scholar ] [ CrossRef ] [ PubMed ]
• Becker, J.M.; Ringle, C.M.; Sarstedt, M.; Völckner, F. How collinearity affects mixture regression results. Mark. Lett. 2015 , 26 , 643–659. [ Google Scholar ] [ CrossRef ]
• Mason, C.H.; Perreault, W.D., Jr. Collinearity, power, and interpretation of multiple regression analysis. J. Mark. Res. 1991 , 28 , 268–280. [ Google Scholar ] [ CrossRef ]
• Hair, J., Jr.; Hair, J.F., Jr.; Sarstedt, M.; Ringle, C.M.; Gudergan, S.P. Advanced Issues in Partial Least Squares Structural Equation Modeling ; Sage Publications: Thousand Oaks, CA, USA, 2023. [ Google Scholar ]
• Hair, J.F.; Ringle, C.M.; Sarstedt, M. PLS-SEM: Indeed a silver bullet. J. Mark. Theory Pract. 2011 , 19 , 139–152. [ Google Scholar ] [ CrossRef ]
• Raithel, S.; Sarstedt, M.; Scharf, S.; Schwaiger, M. On the value relevance of customer satisfaction. Multiple drivers and multiple markets. J. Acad. Mark. Sci. 2012 , 40 , 509–525. [ Google Scholar ] [ CrossRef ]
• Shmueli, G.; Ray, S.; Estrada, J.M.V.; Chatla, S.B. The elephant in the room: Predictive performance of PLS models. J. Bus. Res. 2016 , 69 , 4552–4564. [ Google Scholar ] [ CrossRef ]
• Shmueli, G.; Sarstedt, M.; Hair, J.F.; Cheah, J.H.; Ting, H.; Vaithilingam, S.; Ringle, C.M. Predictive model assessment in PLS-SEM: Guidelines for using PLSpredict. Eur. J. Mark. 2019 , 53 , 2322–2347. [ Google Scholar ] [ CrossRef ]
• Danks, N.P.; Ray, S. Predictions from partial least squares models. In Applying Partial Least Squares in Tourism and Hospitality Research ; Emerald Publishing Limited: Leeds, UK, 2018; pp. 35–52. [ Google Scholar ]
• Khoja, M.; Addrayhem, M. Exploring the relationship between corporate social responsibility and technology adoption on financial performance. Asia-Pac. Manag. Account. J. (APMAJ) 2024 , 19 , 149–181. [ Google Scholar ]
• Al-Malkawi, H.A.N.; Javaid, S. Corporate social responsibility and financial performance in Saudi Arabia: Evidence from Zakat contribution. Manag. Financ. 2018 , 44 , 648–664. [ Google Scholar ] [ CrossRef ]
• Martos-Pedrero, A.; Cortés-García, F.J.; Jiménez-Castillo, D. The relationship between social responsibility and business performance: An analysis of the agri-food sector of southeast Spain. Sustainability 2019 , 11 , 6390. [ Google Scholar ] [ CrossRef ]

Click here to enlarge figure

Share and Cite

Eledum, H.; Elmahgop, F.O. The Effect of Corporate Social Responsibility on Corporate Performance in the Food Industry in Saudi Arabia: A Partial Least Squares Structural Equation Modeling Approach. Sustainability 2024 , 16 , 7925. https://doi.org/10.3390/su16187925

Eledum H, Elmahgop FO. The Effect of Corporate Social Responsibility on Corporate Performance in the Food Industry in Saudi Arabia: A Partial Least Squares Structural Equation Modeling Approach. Sustainability . 2024; 16(18):7925. https://doi.org/10.3390/su16187925

Eledum, Hussein, and Faiza Omer Elmahgop. 2024. "The Effect of Corporate Social Responsibility on Corporate Performance in the Food Industry in Saudi Arabia: A Partial Least Squares Structural Equation Modeling Approach" Sustainability 16, no. 18: 7925. https://doi.org/10.3390/su16187925

Article Metrics

Article access statistics, further information, mdpi initiatives, follow mdpi.

Subscribe to receive issue release notifications and newsletters from MDPI journals

Ph.D Thesis: Impact of Corporate Social Responsibility on Financial Performance and Competitiveness of Business: A Study of Indian Firms

Posted: 16 Apr 2013 Last revised: 1 Dec 2014

Rupal Tyagi

Indian Institute of Technology, Roorkee

Date Written: July 19, 2012

The past two decades have witnessed a remarkable change in the way businesses run and operate, with the quest for excellence and all-round growth the primary objective of corporations. Pursuit of financial growth does not always lead to social advancement, and is often detrimental to the environment, resulting in unhealthy workplaces, exposure to toxic substances, urban decay and other similar issues. Managers and practitioners have often been criticised for being single minded about value maximisation. The turn of events has pressurised firms to put serious efforts into a wide range of Corporate Social Responsibility (CSR) activities. CSR has become a critical aspect in strategic decision making of a firm primarily due to financial scandals and a drop in investors’ confidence. CSR has emerged as a view that can add to the financial performance of a company and suggests that corporate decision-makers must take care of a range of social and environmental affairs in order to maximise long-term financial returns. Every firm differs in the way it implement CSR in strategic business practices, with its size, operating industry, stakeholder demands, historical CSR engagement, level of diversification, research and development and labour market conditions a few of the factors that determine this decision making. One side of the coin confirms the benefits colligated with good reputation, while the other indicates that a firm’s costs of adhering to ethical standards will translate into higher product prices, a competitive disadvantage and lower profitability. Even after deep exploration of the Corporate Financial Performance (CFP)- Corporate Social Performance (CSP) relationship, empirical evidence to date is somewhat conflicting. Globalisation and liberalisation in the Indian economy has shifted corporate goals from a socio - economic focus towards increasing shareholders value to the benefit of various stakeholders. Although extensive research on CSR-CFP has been carried out in developed countries, there is a paucity of such studies in India. The main thrust of the current study is to get intimate with this issue or devise a problem along with attaining new insights into it. This study intends to get to grips with and derive the perceptivity of corporate social behaviour towards its stakeholders along with justifying its triple bottom line benefits while filling the literary gap through replicating and extending previous findings on social and financial performance of firms. In doing so, this study also attempts to analyse in detail the aforesaid relationship and discuss the effectiveness of social and financial performance along with competitive performance of sample Indian companies. The results identify critical Indian CSR factors and determine their importance in shaping the CSP-CFP relationship, on the basis of which further research in sectors identified as weak may be carried out.

Keywords: Corporate Social Responsibility, Corporate Financial Performance, Corporate Social Performance, Competitiveness, globalisation, financial growth, stakeholder relationship, India, transparency and disclosure, environment, business ethics

Suggested Citation: Suggested Citation

Rupal Tyagi (Contact Author)

Indian institute of technology, roorkee ( email ).

Department of Management Studies Roorkee Haridwar, Uttarakhand 247667 India 9717922899 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics, related ejournals, sustainability & economics ejournal.

Subscribe to this fee journal for more curated articles on this topic

Corporate Social Responsibility (CSR) eJournal

Organizations & markets: formal & informal structures ejournal, csr & management practice ejournal, microeconomics: intertemporal firm choice & growth, investment, financing, & capacity ejournal, emerging markets economics: firm behavior & microeconomic issues ejournal.

• < Previous

Home > Theses and Dissertations > Honors Theses > 570

Honors Undergraduate Theses

The effect of corporate social responsibility on firm value and performance.

Jennifer E. Maxey , University of Central Florida Follow

In this thesis, I test the effects of corporate social responsibility (CSR) on firm valuation and performance from the financial crisis of 2007 to year 2013. Prior research on CSR suggests that CSR is related to firm performance, but the results have not been consistent. My study focuses on the time period following the crisis since trust between firms and stakeholders may be more important following a negative shock. The components of CSR are broken out into environmental, human rights, diversity, community impact, employee relations, product, and corporate governance. I find evidence that at least some measures of firm performance are positively related to CSR. Specifically, I find that a high CSR score is associated with a high return on assets. I also find a positive relation with Tobin's Q in certain model specifications. The components of CSR that hold the greatest weight in terms of ROA are environmental, employee relations, diversity, and product strengths. Given the importance of these financial performance measures, my results provide support for corporate spending on social capital.

Thesis Completion

Thesis chair/advisor.

Frye, Melissa

Bachelor Science in Business Administration (B.S.B.A.)

College of Business Administration

Degree Program

Access status.

Open Access

Release Date

Recommended citation.

Maxey, Jennifer E., "The Effect of Corporate Social Responsibility on Firm Value and Performance" (2019). Honors Undergraduate Theses . 570. https://stars.library.ucf.edu/honorstheses/570

Since August 19, 2019

Included in

Finance Commons

Browse Advisors

• Browse recent Advisors

Advanced Search

• Notify me via email or RSS
• Colleges & Departments
• Disciplines
• Expert Gallery
• My STARS Account
• Frequently Asked Questions
• Follow STARS
• About STARS

Home | About | FAQ | My Account | Accessibility Statement

Privacy Copyright

• < Previous

Home > CMC > CMC_STUDENT > CMC_THESES > 529

CMC Senior Theses

Corporate social responsibility and financial performance: does it pay to be good.

Harmony J. Palmer , Claremont McKenna College Follow

Graduation Year

Document type.

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Economics-Accounting

Matthew Magilke

Terms of Use & License Information

Rights Information

© 2012 Harmony J. Palmer

The prominence of corporate social responsibility (CSR) initiatives today suggests that the corporate perception of such policies has shifted from an unnecessary addition to a critical business function. Using a reliable source of data on corporate social performance (CSP), this study explores and tests the relationship between CSP and corporate financial performance (CFP). Unlike prior research, this study additionally tests the impact CSP has on sales and gross margin in hopes of providing insight on sales strategies that can be implemented to maximize the impact of the relationship. The dataset includes most of the S&P 500 firms and covers years 2001-2005. The relationships are tested using time-series regressions. Results indicate that CSP and CFP have a significantly positive relationship in both directions, supporting the view that CSR programs have positive impacts on the bottom-line. Results also indicate that increased CSP leads to increases in gross margin, indicating that some customers are willing to pay a premium for the products and/or services of a company with CSR initiatives. Lastly, results also indicate that increases in CSP leads to a decrease in sales, which implies a decrease in customer base because less people are willing to buy the products at premium. Despite the result on sales, I argue in this paper that firms can increase sales by increasing CSR investments—assuming increases in CSR investments leads to higher CSP—as long as the perception of programs transform from socially responsible, philanthropic actions to programs promoting corporate shared value (CSV).

• Robert Day School Prize for Best Senior Thesis in Economics (Accounting) and Finance

Recommended Citation

Palmer, Harmony J., "Corporate Social Responsibility and Financial Performance: Does it Pay to Be Good?" (2012). CMC Senior Theses . 529. https://scholarship.claremont.edu/cmc_theses/529

Since January 04, 2013

Included in

Accounting Commons , Business and Corporate Communications Commons

Advanced Search

• Notify me via email or RSS
• Colleges, Universities, and Library
• Schools, Programs, and Departments
• Disciplines

Author Corner

• Faculty Submission
• Student Submission
• Policies and Guidelines

Useful Links

• Claremont Colleges Library
• Claremont Colleges Digital Library

Home | About | FAQ | My Account | Accessibility Statement

Privacy Copyright

Impact of Corporate Social Responsibility on Firm Financial Performance in Ghana

• TREMMBIT CONSULT GHANA & TEST INSTITUTE

Discover the world's research

• 25+ million members
• 160+ million publication pages
• 2.3+ billion citations

• Madhu Tyagi

• Elif Akben-Selcuk

• Sagitarian Doni
• Afri Aripin

• Mohammed Nma Ahmed

• Howard Adler
• Maninder S. Sarkaria
• G.S. Shergill

• Daniel Mehari

• Leonid Kogan

• Recruit researchers
• Join for free
• Login Email Tip: Most researchers use their institutional email address as their ResearchGate login Password Forgot password? Keep me logged in Log in or Continue with Google Welcome back! Please log in. Email · Hint Tip: Most researchers use their institutional email address as their ResearchGate login Password Forgot password? Keep me logged in Log in or Continue with Google No account? Sign up

• DOI: 10.28918/jaais.v4i2.1237
• Corpus ID: 272208936

CORPORATE SOCIAL RESPONSIBILITY (CSR) PERFORMANCE AND INVESTMENT EFFICIENCY: THE ROLE OF CHARACTERISTIC OF AUDIT COMMITTEE AS MODERATING VARIABLE

• Yunita Lisnaningtyas Utami , Alfita Rakhmayani , Fatma Azzahra Puspita Sari
• Published in Jurnal Akuntansi dan Audit… 24 December 2023
• Business, Economics

Tables from this paper

28 References

Corporate social responsibility and financial performance: an empirical analysis of indian banks, corporate social responsibility and investment efficiency, the effect of financial reporting quality on corporate investment efficiency: evidence from the tunisian stock market, audit committee characteristics: an empirical investigation of the contribution to intellectual capital efficiency.

• Highly Influential

Audit committee effectiveness and timeliness of reporting: Indonesian evidence

The effects of corporate social responsibility on firm performance: a stakeholder approach, audit committees, corporate governance, and shareholder wealth: evidence from korea, mandatory corporate social responsibility: the indian experience, audit committees and financial reporting quality: the 8th eu company law directive perspective, related papers.

Showing 1 through 3 of 0 Related Papers