The Combined Effect of Firm External and Internal Factors on Corporate Social Responsibility and Firm Performance

Corporate social responsibility (CSR) has received the attention of many organizational decision makers. In this paper, we examine how an external factor, such as industry concentration, affects levels of investment in CSR. We also combine its effects with R&D intensity, an internal resource, to examine the dual effect on CSR, as well as on firm financial performance. It was found that CSR, when considered as a strategic asset to the firm, is positively related to firm financial performance. The study also showed that while industry concentration directly affects R&D intensity, it does not directly affect investments in CSR.