Finding the Link between CSR Reporting and Corporate Financial Performance: Evidence on Czech and Estonian Listed Companies

Abstract

Despite the fact that obligations to publish reports on corporate social responsibility will come into force in the European Union from 2018, an increasing number of companies are starting to implement corporate social responsibility (CSR) policy into their everyday business practices, and as a result the information of this activity is disclosed in CSR reports or within annual reports. As the disclosure of such information is currently voluntarily based, we believe that the growing popularity of CSR leads to a direct link between the sustainability of the company and its nancial performance. The purpose of this paper is therefore to determine the linkage between CSR and nancial performance within two countries in the CEE region -Czech and Estonia -using data from 2012 -2013. We compare return on assets and normalized market value added of listed companies. Based on the results, we can state that the implementation of a standalone CSR report does not have any direct linkage with the nancial performance of the tested companies.

Corporate Social-Environmental Performance versus Financial Performance of Banks in Central and Eastern European Countries

“…The statistical results of the research reveal that the publication of a CSR report does not influence the changes in the banks' financial results; panel regressions have not shown that there is such a link. These results fall in line with the results obtained by Strouhal et al [82] that empirically proved no relationship between the disclosure of standalone CSR reports and financial performance, however they conducted their research only in two countries of CEE e.g., Czech Republic and Estonia. The results that were obtained from the first part of the research highlight that the CSR activities do not impact the bottom line of the banks in CEEC or at least that the effects are not seen in the following year.…”

Effect of Corporate Social Responsibility Disclosure on Financial Performance

“…Although these studies had different results, the majority concluded that corporate social responsibility disclosure has a positive impact on business efficiency. Several studies had reported negative results Makni et al (2009) and in some cases there were not statistically significant Strouhal et al (2015), Khlif et al (2015), Tjia& Setiawati (2012). In Vietnam, some studies have investigated the current state and benefits of corporate social responsibility disclosure.…”

“…With increasing community interest in corporate social responsibility, many studies in the world have been conducted to verify the impact of corporate social responsibility disclosure to business efficiency such as Mahoney & Roberts (2007), Makni et al (2009), Saleh et al (2011), Tjia & Setiawati (2012), Vurro & Perrini (2011), Lu et al (2015), Strouhal et al (2015), Jitaree (2015). Impacts are expressed in a variety of indicators, such as the impact on a firm's share price, return on assets (ROA), return on equity (ROE), market value compared to book value Tobin'Q, revenues of enterprises.…”

Corporate Governance Quality On Specific Case Of Romanian Listed Companies

“…In December 2014 came in force an update of accounting Directive 2013/34/EU on Disclosure of Non-Financial and Diversity Information by Certain Large Companies. Based on the Brussels view, first company reports including such information shall be published in 2018 covering financial year 2017-2018 (Strouhal et al, 2015). According to this directive management report of large companies shall also cover corporate governance statement providing at least the following information:…”