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Corporate Social Responsibility and Financial Performance: A Relationship Mediated by Stakeholder Satisfaction

Author

Listed:
  • Oscar Licandro

    (Cathedra of Organizational Social Responsibility, Universidad CLAEH (Centro Latinoamericano de Economía Humana), Montevideo 11100, Uruguay)

  • José Luis Vázquez Burguete

    (Business Management and Economics Department, Universidad de León, 24071 León, Spain)

  • Luis Camilo Ortigueira-Sánchez

    (Department of Administration, Faculty of Business, Universidad del Pacífico, Jesús María 15072, Peru)

  • Patricia Correa

    (Department of Administration and Finance, Universidad Católica del Uruguay, Montevideo 11600, Uruguay)

Abstract

Research work on the relationship between Corporate Social Responsibility and financial performance has been going on for seven decades. Even when the prevailing studies are those that found a positive influence of social responsibility on financial performance, strong conclusive results are still unavailable. Some explanations for this situation are based, among other reasons, on the fact that the variables have a relation mediated by multiple factors. Additionally, it is still unknown whether the results obtained can be extrapolated to all types of companies since the majority of studies have focused on large companies listed on the stock exchange. This research studied how one of those factors (stakeholder satisfaction) mediated in companies of different sizes (including SMEs) and different types of companies (publicly listed companies or private ownership companies). A questionnaire was used, including indices relative to (1) the degree of development of the company’s social responsibility policies, (2) the changes in the satisfaction of four key stakeholders (employees, customers, suppliers, and shareholders) and financial performance (sales and profitability). Findings show the existence of a correlation between social responsibility and financial performance and also that such a relationship is mediated by the satisfaction of stakeholders. That relationship was also found to be independent of company sizes and the type of company This research work is intended to be a contribution towards that field of study, as it has detected a relationship between variables in medium-sized and private ownership companies.

Suggested Citation

  • Oscar Licandro & José Luis Vázquez Burguete & Luis Camilo Ortigueira-Sánchez & Patricia Correa, 2024. "Corporate Social Responsibility and Financial Performance: A Relationship Mediated by Stakeholder Satisfaction," Administrative Sciences, MDPI, vol. 14(1), pages 1-25, January.
    • Handle: RePEc:gam:jadmsc:v:14:y:2024:i:1:p:15-:d:1319952
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    References listed on IDEAS

    as
    1. Abagail McWilliams & Donald Siegel, 2000. "Corporate social responsibility and financial performance: correlation or misspecification?," Strategic Management Journal, Wiley Blackwell, vol. 21(5), pages 603-609, May.
    2. Iftekhar Hasan & Nada Kobeissi & Liuling Liu & Haizhi Wang, 2018. "Corporate Social Responsibility and Firm Financial Performance: The Mediating Role of Productivity," Journal of Business Ethics, Springer, vol. 149(3), pages 671-688, May.
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