Does corporate governance shape the relationship between corporate social responsibility and financial performance?

Abstract

Purpose The theoretical and empirical relationships between corporate social responsibility (CSR) and corporate financial performance are not without controversy. Yet, CSR activities are increasingly undertaken by a large number of firms, not only in developed countries but also in emerging countries. This paper aims to investigate the moderating effect of different aspects of corporate governance, which are foreign and state ownership, board size and board independence, on the relationship between CSR and financial performance. Design/methodology/approach A sample of Vietnamese listed firms is analyzed. Robust regression analysis is performed using ordinary least squares as well as fixed-effects and two-stage least squares model. Findings Ordinary least squares regression results show that CSR activities affect the financial performance of firms positively. Furthermore, corporate governance features like foreign ownership, board size and board independence strengthen the positive relationship between CSR and financial performance, but there is no such impact of state ownership. Originality/value Previous studies mostly investigate the direct effect of CSR on financial performance. A few studies examine the moderating effect of corporate governance, which is ownership concentration and board gender diversity. As an emerging country, Vietnam has some specific characteristics on corporate governance. This paper contributes by investigating the moderating effect of few major aspects of corporate governance, which are foreign and state ownership, board size and board independence.

Impact of applying social responsibility accounting on companies' financial performance

“…This is in addition to improving its legal and ethical status which eventually leads to realizing the highest amounts of profits. Such results were similar to those of Kabir & Thai (2017), Akisik & Gal (2017) and Nollet et al (2016), while the result contradicted with the study of Madorran & Garcia (2016) conducted in Spain. 5.…”

“…Therefore, it affects the company's performance positively and thus helps companies' administrations achiever good profits of their shares. These results were similar to those of Kabir & Thai (2017), Akisik & Gal (2017) and Nollet et al (2016). However, they contradicted with the study of Madorran & Garcia (2016) conducted in Spain and the study of Rehm & Hirigoyen (2015) conducted in the United States, Europe and the Asia-Pacific region.…”

Pengaruh Corporate Social Responsibility terhadap Kinerja Keuangan Perusahaan dan Earning Management sebagai Variabel Moderasi

“…Hasil penelitian ini konsisten dengan penelitian sebelumnya (Sial et al, 2018). Khabir dan Thai 2017 Sial et al (2018), Nyeadi et al (2018), dan Kabir and Thai (2017). Margaretha dan Witedjo (2014) menjelaskan bahwa investor di Negara berkembang kurang peduli dengan laporan tanggung jawab sosial perusahaan sehingga CSR yang dilakukan perusahaan di Indonesia masih belum dapat mempengaruhi kinerja perusahaan.…”

Asymmetry and Governance of Corporate Social Responsible Disclosure in Indonesia

“…CSR have increasingly drawn the attention of customers investors, suppliers, and governments from all over the world (Kabir and Thai, 2017). To that end, many companies are getting more interested in reporting their corporate social responsibilies or initiate their CSR activities (Setiawan, 2016).…”

“…3rd ICEEBA CSR activities have increased with the rapid growth of the stock market which has led to increased demand for transparency(Kabir and Thai, 2017). Earnings management can reduce transparency when related information on earnings management is not fully disclosed.…”