Does corporate social responsibility lead to improved firm performance? The hidden role of financial slack
Purpose The purpose of this study is to investigate the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP), as the findings on the relationship have been inconsistent and have led to calls to further examine this relationship. However, instead of inv...
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| Veröffentlicht in: | Social responsibility journal 2020-08, Vol.16 (7), p.957-982 |
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| container_title | Social responsibility journal |
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| creator | Lin, Woon Leong Ho, Jo Ann Ng, Siew Imm Lee, Chin |
| description | Purpose
The purpose of this study is to investigate the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP), as the findings on the relationship have been inconsistent and have led to calls to further examine this relationship. However, instead of investigating the connection between CSR and CFP, academics have stated that a contingency viewpoint must be used for uncovering the context and conditions which catalyse the relationship between both constructs.
Design/methodology/approach
This study acquired the CSR data from 100 companies listed in Fortune’s most admired US companies between 2007 and 2016. These data were used to investigate the CSR–CFP link with the help of the dynamic panel data system, which is the generalised method of moments (GMM) estimator.
Findings
The results indicate that CSR and CFP have a neutral relationship which characterises the effect between CFP and CSR. However, this study found that financial slack positively affected the CSR–CFP relationship, implying that companies will only benefit from CSR activities if they have excess financial resources.
Originality/value
This study offers a very distinctive perspective regarding the CSR–CFP link according to the financial slack perspective. |
| doi_str_mv | 10.1108/SRJ-10-2018-0259 |
| format | Article |
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The purpose of this study is to investigate the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP), as the findings on the relationship have been inconsistent and have led to calls to further examine this relationship. However, instead of investigating the connection between CSR and CFP, academics have stated that a contingency viewpoint must be used for uncovering the context and conditions which catalyse the relationship between both constructs.
Design/methodology/approach
This study acquired the CSR data from 100 companies listed in Fortune’s most admired US companies between 2007 and 2016. These data were used to investigate the CSR–CFP link with the help of the dynamic panel data system, which is the generalised method of moments (GMM) estimator.
Findings
The results indicate that CSR and CFP have a neutral relationship which characterises the effect between CFP and CSR. However, this study found that financial slack positively affected the CSR–CFP relationship, implying that companies will only benefit from CSR activities if they have excess financial resources.
Originality/value
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The purpose of this study is to investigate the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP), as the findings on the relationship have been inconsistent and have led to calls to further examine this relationship. However, instead of investigating the connection between CSR and CFP, academics have stated that a contingency viewpoint must be used for uncovering the context and conditions which catalyse the relationship between both constructs.
Design/methodology/approach
This study acquired the CSR data from 100 companies listed in Fortune’s most admired US companies between 2007 and 2016. These data were used to investigate the CSR–CFP link with the help of the dynamic panel data system, which is the generalised method of moments (GMM) estimator.
Findings
The results indicate that CSR and CFP have a neutral relationship which characterises the effect between CFP and CSR. However, this study found that financial slack positively affected the CSR–CFP relationship, implying that companies will only benefit from CSR activities if they have excess financial resources.
Originality/value
This study offers a very distinctive perspective regarding the CSR–CFP link according to the financial slack perspective.</description><subject>Academic staff</subject><subject>Annual reports</subject><subject>Ethics</subject><subject>Financial performance</subject><subject>Organizational performance</subject><subject>Panel data</subject><subject>Researchers</subject><subject>Scandals</subject><subject>Social responsibility</subject><subject>Society</subject><subject>Stakeholders</subject><issn>1747-1117</issn><issn>1758-857X</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2020</creationdate><recordtype>article</recordtype><sourceid>ABUWG</sourceid><sourceid>AFKRA</sourceid><sourceid>AZQEC</sourceid><sourceid>BENPR</sourceid><sourceid>CCPQU</sourceid><sourceid>DWQXO</sourceid><sourceid>GNUQQ</sourceid><recordid>eNptkc1LxDAQxYMouK7ePQY8x03Spk1OIn7LgqAreCtpMmGztk1NusL-97asF8HTPJj3ZobfIHTO6CVjVC7eXp8Jo4RTJgnlQh2gGSuFJFKUH4eTzkvCGCuP0UlKG0oLyaiaoc1tgIRNiH2IegCcgvG6wRFSH7rka9_4YYcb0BYPAfu2j-EbLHY-triH6EJsdWfgCq_WgNfeWuhwDA3g4EZTN_amcanR5vMUHTndJDj7rXP0fn-3unkky5eHp5vrJTEZE4pYZ3KluC5FblVtgVLJGBS64A54pqxQtjC5oI47w-uM105aKKTNy9pRDZDN0cV-7njr1xbSUG3CNnbjyoqLjMtMUk5HF927TAwpRXBVH32r465itJqIViPRSU9Eq4noGFnsI9BC1I39L_HnB9kP28Z5GQ</recordid><startdate>20200831</startdate><enddate>20200831</enddate><creator>Lin, Woon Leong</creator><creator>Ho, Jo Ann</creator><creator>Ng, Siew Imm</creator><creator>Lee, Chin</creator><general>Emerald Publishing Limited</general><general>Emerald Group Publishing Limited</general><scope>AAYXX</scope><scope>CITATION</scope><scope>0-V</scope><scope>0U~</scope><scope>1-H</scope><scope>3V.</scope><scope>7WY</scope><scope>7WZ</scope><scope>7X5</scope><scope>7XB</scope><scope>8BJ</scope><scope>8FI</scope><scope>8FK</scope><scope>ABUWG</scope><scope>AEUYN</scope><scope>AFKRA</scope><scope>ALSLI</scope><scope>AZQEC</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DWQXO</scope><scope>FQK</scope><scope>FYUFA</scope><scope>F~G</scope><scope>GNUQQ</scope><scope>HEHIP</scope><scope>JBE</scope><scope>K6~</scope><scope>L.-</scope><scope>L.0</scope><scope>M0C</scope><scope>M0T</scope><scope>M2R</scope><scope>M2S</scope><scope>PQBIZ</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>Q9U</scope></search><sort><creationdate>20200831</creationdate><title>Does corporate social responsibility lead to improved firm performance? The hidden role of financial slack</title><author>Lin, Woon Leong ; Ho, Jo Ann ; Ng, Siew Imm ; Lee, Chin</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c3159-dfc4992a754d9bde00811e6a62fe239d59d6c450f2fc2b32bf8de68d47bf0aee3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2020</creationdate><topic>Academic staff</topic><topic>Annual reports</topic><topic>Ethics</topic><topic>Financial performance</topic><topic>Organizational performance</topic><topic>Panel data</topic><topic>Researchers</topic><topic>Scandals</topic><topic>Social responsibility</topic><topic>Society</topic><topic>Stakeholders</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Lin, Woon Leong</creatorcontrib><creatorcontrib>Ho, Jo Ann</creatorcontrib><creatorcontrib>Ng, Siew Imm</creatorcontrib><creatorcontrib>Lee, Chin</creatorcontrib><collection>CrossRef</collection><collection>ProQuest Social Sciences Premium Collection</collection><collection>Global News & ABI/Inform Professional</collection><collection>Trade PRO</collection><collection>ProQuest Central (Corporate)</collection><collection>ABI/INFORM Collection</collection><collection>ABI/INFORM Global (PDF only)</collection><collection>Entrepreneurship Database</collection><collection>ProQuest Central (purchase pre-March 2016)</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>Hospital Premium Collection</collection><collection>ProQuest Central (Alumni) (purchase pre-March 2016)</collection><collection>ProQuest Central (Alumni Edition)</collection><collection>ProQuest One Sustainability</collection><collection>ProQuest Central UK/Ireland</collection><collection>Social Science Premium Collection</collection><collection>ProQuest Central Essentials</collection><collection>ProQuest Central</collection><collection>Business Premium Collection</collection><collection>ProQuest One Community College</collection><collection>ProQuest Central Korea</collection><collection>International Bibliography of the Social Sciences</collection><collection>Health Research Premium Collection</collection><collection>ABI/INFORM Global (Corporate)</collection><collection>ProQuest Central Student</collection><collection>Sociology Collection</collection><collection>International Bibliography of the Social Sciences</collection><collection>ProQuest Business Collection</collection><collection>ABI/INFORM Professional Advanced</collection><collection>ABI/INFORM Professional Standard</collection><collection>ABI/INFORM Global</collection><collection>Healthcare Administration Database</collection><collection>Social Science Database</collection><collection>Sociology Database</collection><collection>ProQuest One Business</collection><collection>ProQuest One Academic Eastern Edition (DO NOT USE)</collection><collection>ProQuest One Academic</collection><collection>ProQuest One Academic UKI Edition</collection><collection>ProQuest Central Basic</collection><jtitle>Social responsibility journal</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Lin, Woon Leong</au><au>Ho, Jo Ann</au><au>Ng, Siew Imm</au><au>Lee, Chin</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Does corporate social responsibility lead to improved firm performance? The hidden role of financial slack</atitle><jtitle>Social responsibility journal</jtitle><date>2020-08-31</date><risdate>2020</risdate><volume>16</volume><issue>7</issue><spage>957</spage><epage>982</epage><pages>957-982</pages><issn>1747-1117</issn><eissn>1758-857X</eissn><abstract>Purpose
The purpose of this study is to investigate the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP), as the findings on the relationship have been inconsistent and have led to calls to further examine this relationship. However, instead of investigating the connection between CSR and CFP, academics have stated that a contingency viewpoint must be used for uncovering the context and conditions which catalyse the relationship between both constructs.
Design/methodology/approach
This study acquired the CSR data from 100 companies listed in Fortune’s most admired US companies between 2007 and 2016. These data were used to investigate the CSR–CFP link with the help of the dynamic panel data system, which is the generalised method of moments (GMM) estimator.
Findings
The results indicate that CSR and CFP have a neutral relationship which characterises the effect between CFP and CSR. However, this study found that financial slack positively affected the CSR–CFP relationship, implying that companies will only benefit from CSR activities if they have excess financial resources.
Originality/value
This study offers a very distinctive perspective regarding the CSR–CFP link according to the financial slack perspective.</abstract><cop>Bingley</cop><pub>Emerald Publishing Limited</pub><doi>10.1108/SRJ-10-2018-0259</doi><tpages>26</tpages><oa>free_for_read</oa></addata></record> |
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| identifier | ISSN: 1747-1117 |
| ispartof | Social responsibility journal, 2020-08, Vol.16 (7), p.957-982 |
| issn | 1747-1117 1758-857X |
| language | eng |
| recordid | cdi_emerald_primary_10_1108_SRJ-10-2018-0259 |
| source | Emerald Journals |
| subjects | Academic staff Annual reports Ethics Financial performance Organizational performance Panel data Researchers Scandals Social responsibility Society Stakeholders |
| title | Does corporate social responsibility lead to improved firm performance? The hidden role of financial slack |
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