Impacts of Firm Performance on Corporate Social Responsibility Practices: The Mediation Role of Corporate Governance in Ethiopia Corporate Business

Abstract

In today’s globalized economy, the corporate company faces ever-increasing competitive and social pressures. This paper aims to identify the impacts of firms’ performance on corporate social responsibility practices using the mediating roles of corporate governance evidence from Ethiopia’s corporate business. The impacts of firms’ performance on CSR and corporate governance as a mediator variable were studied using a sample of TIRET corporate companies, in the Amhara region, Ethiopia. The structural equation model and multiple regression analysis were estimated and tested using 21 corporate companies. The derived model reveals how corporate governance mediates the favorable relationship between CSR and firm performance. The result indicates that a firm’s performance is the most significant influencing factor on CSR among the impacts examined in this study. Corporate governance has a positive role in serving as a legitimacy source for CSR practice. This study discusses the significance of results-based resource theory and presents the conclusion and implications. To solve the gaps in firm performance, return on asset, debts on capital structure, and governance, the corporate firms should identify unproductive enterprises and outsource non-core values. To overcome the existed inefficiency difficulties, this study proposed that corporate enterprises should be restructured, rebranded, reconsider their business models, and acquire technology-based firms. This paper contributes to CSR literature in the context of emerging economies. Firms, policymakers, and practitioners may take steps to improve CSR practice. In general, we conclude that in Ethiopia, including in the Amhara region, socially responsible corporate enterprises are more likely to be successful, and vice versa.

Gym-Goers Preference Analysis of Fitness Centers during the COVID-19 Pandemic: A Conjoint Analysis Approach for Business Sustainability

“…The one developed by Yang and Xia [54] highlighted pricing strategies for business sustainability. In addition, the model utilized by Ying et al [55] highlighted how restructuring, rebranding, and reconsideration of the current business should be done for efficiency. Lastly, the model considered by Ahmad et al [56] focused on service-related in accordance to sales.…”

An empirical investigation of firm performance through corporate governance and information technology investment with mediating role of corporate social responsibility: Evidence from Saudi Arabia telecommunication sector

“…According to the hypothesis, CSR may be able to assist a firm in more effectively utilizing its resources, which may ultimately lead to greater commercial outcomes. This assumption, on the other hand, has not yet been shown beyond a reasonable doubt ( Ying et al, 2021 ). On the other hand, it seems that CSR has a complicated and ambiguous influence on performance, despite the fact that there is no specific support for this theory.…”

“…According to Krishnan, the occurrence of problems with an organization’s internal controls is far less likely to be connected with the presence of independent audit committees and audit committees that have financial knowledge. According to the findings of Ying et al (2021) , audit committees that have entirely independent members and at least one member with prior expertise in accounting or a related field have a negative correlation with financial restatements. Research conducted by Amin et al (2021) found that businesses that engage in fraudulent activity are more likely to have less independent audit committees.…”

Tata Kelola Perusahaan Memoderasi Hubungan Corporate Social Responsibility dan Kinerja Keuangan

“…Tanggung jawab sosial (CSR) termasuk suatu proses dalam menyatukan masalah terkait sosial, ekonomi, lingkungan, etika, hak hak asasi manusia, dan juga konsumen ke dalam aktivitas -aktivitas operasi bisnis perusahaan (Ying et al, 2021). CSR juga dapat berupa kesadaran perusahaan, kesuksesan sosial, atau bisnis yang berkelanjutan dan bertanggung jawab.…”