Corporate social responsibility and firms’ financial performance: a multi-level serial analysis underpinning social identity theory

Abstract

This research aims to investigate how firms' Corporate Social Responsibility (CSR) perception and disclosure derive accounting, market, and perception-based Firms' Financial Performance (FFP) through the serial mediation of individual-level organizational identification (OID) and employees' innovative job performance (EIJP). Philosophically, this research comes under the beliefs or worldview of postpositivism and employed a quantitative research design. And thus, the approach to theory development is deductive. Multi-method, multi-source and multilevel data with temporal breaks are collected from 60 manufacturing firms listed on the Pakistan Stock Exchange (PSE). Primary data are collected by following the survey strategy and by conducting multiple surveys. While the secondary data are collected from the annual and sustainability reports published by selected firms on their official websites. This research found the serial mediation of OID and employees' innovative job performance on the CSR-FFP relationship. Our results will assist the management of the firms to understand the strategic implications of their CSR initiatives. In particular, this research contributed to understand why CSR is viewed to have strategic importance for the firms and how social identity theory (SIT) might be utilized in such endeavors.

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

“…Some authors consider CSR actions as "marketing techniques that enable companies to simultaneously pursue economic and social goals" [43]. The complexity of the CSR construct has very different objectives because it aims to satisfy other stakeholders and not all of them have the same interest in the firm's performance [18]. From a strategic point of view, CSR contributes to increasing a firm's value through superior competitive advantage [40], which may be related to human, organizational, or relational elements [5].…”

“…In this sense, specific works suggest a direct link between CSR-employee behavior [20] and CSR-customer satisfaction [22]. When the firms adopt CSR practices, it contributes to building closer relationships with their stakeholders [43], and particularly in human resources management, customer satisfaction or firm reputation [18].…”

“…In this sense, [17] has stressed the importance of developmental models incorporating omitted variables and test mediating mechanisms to establish causal links between CSR practices and business performance. Although the most recent literature in this field showcases models that incorporate mediation mechanisms with variables, such as firm reputation [6], individual-level organizational identification, employees' innovative job performance [18], or customer loyalty [19], there remains a wide field of research due to the diversity of variables that are part of the strategic management of the firms. The progressive incorporation of variables with mediating effects will help to understand and reach a consensus on how CSR actions and performance are related within the company.…”

Impact of CSR on Organizational Behavior during a Pandemic: Highlighting Public Health and Safety in the Airline Industry

“…Previous studies have adopted social identity theory to explain how CSR creates a virtuous reputation and encourages employees to identify with their companies. Mahmood et al [44] showed that, when an organization engages in CSR activities, its members value being part of that organization, have a sense of belonging, and feel positive and respectful about the business. In the context of tourism and hospitality, Kim et al [45] used social identity theory to show that employees feel personal pride if their organization cares about CSR activities.…”

Influence of Social Media on Corporate Communication Social Responsibility Under Entrepreneurial Psychology

“…Hao and Li (2018) constructed an index system from three aspects, namely, managerial characteristics, enterprise characteristics, and social supervision characteristics, and established an ordered profit model to study the influencing factors of CSR fulfillment ( Hao and Li, 2018 ). Mahmood et al (2021) studied the influencing factors and economic consequences of CSR and found that CSR is conducive to the improvement of corporate performance ( Mahmood et al, 2021 ). Liu X. P. et al (2020) explored the influencing factors of consumer willingness to continue to participate in CSR activities, such as “CSR-CA,” “social existence,” and “self-construction,” with the help of relevant theoretical perspectives in social media and other fields ( Liu X. P. et al, 2020 ).…”