Corporate social responsibility and corporate financial performance: Evidence from Korea

Abstract

This paper studies the empirical relation between corporate social responsibility (CSR) and corporate financial performance in Korea using a sample of 1222 firm-years during 2002—2008. We measure corporate social responsibility by both an equal-weighted CSR index and a stakeholder-weighted CSR index suggested by Akpinar et al. (2008). Corporate financial performance is measured by return on equity, return on assets, and Tobin’s Q. We find a positive and significant relationship between corporate financial performance and the stakeholder-weighted CSR index, but not the equal-weighted CSR index. This finding is robust to alternative model specifications and several additional tests, providing evidence in support of instrumental stakeholder theory.

Corporate Social Responsibility and Financial Constraints: Evidence from Korean Firms

“…In other words, EW_CSR variable does not control "stakeholder misalignment" problem discussed in previous literature -relating stakeholder specific variables to a set of aggregated stakeholder variables ignoring many differences that exist between different stakeholder groups. We thus introduce weighted measures of CSR, as proposed by Akpinar et al (2008) and Choi et al(2010). The second proxy is the stakeholder-weighted CSR index suggested by Akpinar et al (2008) and Choi et al (2010).…”

“…We thus introduce weighted measures of CSR, as proposed by Akpinar et al (2008) and Choi et al(2010). The second proxy is the stakeholder-weighted CSR index suggested by Akpinar et al (2008) and Choi et al (2010). This is a new CSR measure that reflects the relative importance of each stakeholder group based on the industry to which an individual firm belongs.…”

“…We measure corporate social responsibility by both an equal-weighted CSR index and a stakeholder-weighted CSR index suggested by Akpinar et al(2008) and Choi et al(2010). Corporate financial constraints are measured by KZ index suggested by Kaplan and Zingales(1997).…”

Relationship between corporate social responsibility and business success: Case of the global tobacco industry

“…As scientifically founded research is not based on subjective assessments and informal information 4 , but on generally accepted standards, in this research, as a source of estimation of CSR for companies in the sample, the CSRHub will be used as a standard. It is a tool that provides access to the ratings and information on socially responsible and sustainable business for 17,487 companies from 535 industries and 134 countries (CSRHub 2016).…”

Does R&D investment under corporate social responsibility increase firm performance?

“…CSR engagement could have a positive influence on customer satisfaction and financial performance (Choi, Kwak, and Choe, 2010). Waddock and Graves (1997) find that CSR engagement has a positive effect on the returns of assets.…”