The Moderating Effect of Dividend Policy on the Relationship between Corporate Social Responsibility and Financial Performance: Evidence from French Context

Abstract

Purpose: This study aims to investigate the relationship between Corporate Social Responsibility and financial performance and shows how dividend policy can moderate this relationship. Design/methodology/approach: This topic was based on a sample of 200 firms over the period 2010-2021. The direct and moderating effects were tested by using multiple regression techniques. Findings: The authors have demonstrated that Corporate Social Responsibility positively impacts a firm's financial performance proxy with Tobin's Q (TQ), suggesting that investment in social activities helps firms achieve better financial results. This research also shows that dividend policy positively moderates the impact of Corporate Social Responsibility on corporate financial performance. Practical implications: These findings may be important to academic researchers, practitioners, and regulators who are interested in discovering dividend policies, financial performance, and Corporate Social Responsibility. They can help different stakeholders, policy-makers, and regulatory bodies who are into enhancing corporate governance initiatives to strengthen Corporate Social Responsibility. As an extension to this research, further study can examine the impact of ownership structure and financial performance on Corporate Social Responsibility issues. Originality/value: It adds to the current Corporate Social Responsibility literature, dividend policy's impact on the Corporate Social Responsibility-financial performance relationship.