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A Fusion Approach for Exploring the Key Factors of Corporate Governance on Corporate Social Responsibility Performance

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  • Kuang-Hua Hu

    (Accounting School, Nanfang College of Sun Yat-sen University, Guangzhou 510970, China
    Finance and Accounting Research Center, Nanfang College of Sun Yat-sen University, Guangzhou 510990, China)

  • Sin-Jin Lin

    (Department of Accounting, Chinese Culture University, Taipei 11114, Taiwan)

  • Ming-Fu Hsu

    (English Program of Global Business, Chinese Culture University, Taipei 11114, Taiwan)

Abstract

It is widely recognized that a firm’s well-established corporate governance (CG) has a considerable impact on its corporate social responsibility (CSR) performance. How to determine the main trigger among CG’s indicators for strengthening CSR performance is thus an urgent and complicated task due to its (i.e., CSR) multi-dimensional and numerous perspectives. In order to solve this critical problem, the study breaks down CSR into four dimensions and further examines the impact of CG’s indicators on each CSR dimension by joint utilization of rough set theory (RST) and decision tree (DT). By doing so, users can realize which one CG indicator is the most essential to CSR performance. Managers can take the results as a reference to allocate valuable and scarce resources to the right place so as to enhance CSR performance in the future. To solidify our research finding, we transform the CSR forecasting model selection into a multiple criteria decision making (MCDM) task and execute a MCDM algorithm. By implementing the MCDM algorithm, users can achieve a much more reliable and consensus decision in today’s highly turbulent economic environment. The proposed mechanism, examined by real cases, is a promising alternative for CSR performance forecasting.

Suggested Citation

  • Kuang-Hua Hu & Sin-Jin Lin & Ming-Fu Hsu, 2018. "A Fusion Approach for Exploring the Key Factors of Corporate Governance on Corporate Social Responsibility Performance," Sustainability, MDPI, vol. 10(5), pages 1-18, May.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:5:p:1582-:d:146532
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    1. María del Mar Miras-Rodríguez & Domingo Martínez-Martínez & Bernabé Escobar-Pérez, 2018. "Which Corporate Governance Mechanisms Drive CSR Disclosure Practices in Emerging Countries?," Sustainability, MDPI, vol. 11(1), pages 1-20, December.
    2. Shan Xu & Panyi Ma, 2022. "CEOs’ Poverty Experience and Corporate Social Responsibility: Are CEOs Who Have Experienced Poverty More Generous?," Journal of Business Ethics, Springer, vol. 180(2), pages 747-776, October.
    3. Marian Siminica & Mirela Cristea & Mirela Sichigea & Gratiela Georgiana Noja & Ion Anghel, 2019. "Well-Governed Sustainability and Financial Performance: A New Integrative Approach," Sustainability, MDPI, vol. 11(17), pages 1-21, August.
    4. Ovidiu-Constantin Bunget & Dorel Mateș & Alin-Constantin Dumitrescu & Oana Bogdan & Valentin Burcă, 2020. "The Link between Board Structure, Audit, and Performance for Corporate Sustainability," Sustainability, MDPI, vol. 12(20), pages 1-27, October.
    5. Mushang Lee & Yu-Lan Huang, 2020. "Corporate Social Responsibility and Corporate Performance: A Hybrid Text Mining Algorithm," Sustainability, MDPI, vol. 12(8), pages 1-19, April.

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