Corporate social responsibility and financial performance: The case of the Saudi companies

Abstract

This research examines the effects of Corporate Social Responsibility (CSR) on financial performance in the Saudi companies' context. In this context measuring, CSR is a necessary condition for knowledge of their own social responsibility and thus to control environmental and social impacts. Assessing the social and environmental performance, the establishment of a steering system for the performance and accountability on these external dimensions imply the existence of metrics to assess the quality of management of the business-related non-financial. The CSR and the financial performance are measured using two accounting variables: Return on assets (ROA) and return on equity (ROE). The financial data are collected from the last ten years (2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015)(2016)(2017). The results show the absence of a relationship between the CSR and the financial performance measured by ROA, whereas there is a positive relationship if the financial performance is measured by the ROE.

The Influence of Corporate Social Responsibility Disclosure, Leverage, Sales Growth, and Industry Type on Profitability in Manufacturing Companies Listed at Indonesia Stock Exchange

“…Companies with the high profile type of industry will improve the return on assets (ROA), because high profile industry has a large operational scope so it is easier to get more confidence of the investors to make their investment decisions in company. This finding is consistent with a research conducted by Dkhili and Ansi (2012) and Vollono (2010), who examined the relationship between industry type and company profitability, and concluded that there is a positive relationship between industry type and company's profitability.…”

“…Industrial type measures how large the company's operational scope. Dkhili and Ansi (2012) stated that the type of industry has an influence on the profitability of a company. Investors will be more interested in companies with large operational scope.…”

Corporate Social Responsibility Disclosure and Firm Performance of Malaysian Public Listed Firms

“…Most of the abroad researchers claimed that the CSR disclosure and financial performance indicators like return on assets (ROA) and return on equity (ROE) had positive relationship. Researchers like Mittal, Sinha and Singh (2008), Fooladi and Kolaie (2015), Mujahid and Abdullah (2014), Kabir and Hanh (2017), Uadiale and Fagbemi (2012), Kanwal, Khanam, Nasreen, and Hameed (2013), Yusoff and Adamu (2016), and Dkhili and Ansi (2012) found the existence of positive effect of CSR on firm performance. A study by Mittal, Sinha and Singh (2008) stated that there was a slight proof that firms with code of ethics had produced additional market value added (MVA) than those without codes.…”

“…Also, research by Dkhili and Ansi (2012) debated that CSR and ROE is positive related. The positive relationship between CSR and ROE was due to the presence of stakeholders would improve performance in term of economic.…”

Press Release by Medco E&P Malaka on Serambi Indonesia Online News Coverage

“…Social responsibility (Porter & Kramer, 2006;McWilliams, Siegel, & Wright, 2006); Mansur, 2019;Murphy & Ng'ombe, 2009;Dkhili & Dhiab, 2019) is defined as an organization's way of integrating social, environmental and economic interests in cultural values, decision making, establishing strategies and executing operations of the organization, in a transparent and accountable manner. The implementation of these various aspects is expected to enable the improvement of the community's social welfare.…”