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Do Employees Matter in the Relationship between Corporate Social Responsibility and Financial Performance?

Author

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  • Jae Mee Yoo

    (School of Business Administration, Cheongju University, Cheongju 28503, Korea)

  • Woojae Choi

    (School of Business Administration, Cheongju University, Cheongju 28503, Korea)

  • Mi Lim Chon

    (School of Business Administration, Cheongju University, Cheongju 28503, Korea)

Abstract

This study investigated the mechanism behind the impact of corporate social responsibility (CSR) on firms’ financial performance while focusing on internal stakeholders. Although many studies have examined the effects of CSR few has empirically investigated the underlying process of the mechanism. In addition, previous research has rarely regarded employees as a link between CSR and firms’ outcomes, despite employees implementing CSR policies. This study explored the pathway of the CSR-employees-firm’s performance. Employee commitment was used to explain the relationship between CSR and performance, since it is an important employee-associated micro-level outcome of CSR. The results showed that CSR indirectly influenced a firm’s accounting profitability through enhanced employee commitment, as well as directly affected firm’s profitability. CSR increases employee commitment, which in turn leads to improvements in a firm’s accounting returns. The paper suggests that employees should be considered as an important agent for the effects of CSR initiatives.

Suggested Citation

  • Jae Mee Yoo & Woojae Choi & Mi Lim Chon, 2019. "Do Employees Matter in the Relationship between Corporate Social Responsibility and Financial Performance?," Sustainability, MDPI, vol. 11(22), pages 1-13, November.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:22:p:6251-:d:284581
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    References listed on IDEAS

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    Cited by:

    1. Chang Seop Rhee & Sohee Woo & So-Jin Yu & Hyunjung Rhee, 2021. "Corporate Social Responsibility and Sustainable Employability: Empirical Evidence from Korea," Sustainability, MDPI, vol. 13(14), pages 1-14, July.
    2. Belen Lopez & Alfonso Torres & Alberto Ruozzi & Jose Antonio Vicente, 2020. "Main Factors for Understanding High Impacts on CSR Dimensions in the Finance Industry," Sustainability, MDPI, vol. 12(6), pages 1-17, March.
    3. Yuting Zhang & Xiaofen Yu & Ning Cai & Yong Li, 2020. "Analyzing the Employees’ New Media Use in the Energy Industry：The Role of Creative Self-Efficacy, Perceived Usefulness and Leaders’ Use," Sustainability, MDPI, vol. 12(3), pages 1-13, January.
    4. Chu-Hsuan Chang & Hsiou-Wei Lin & Wen-Hsien Tsai & Wei-Liang Wang & Cheng-Tsu Huang, 2021. "Employee Satisfaction, Corporate Social Responsibility and Financial Performance," Sustainability, MDPI, vol. 13(18), pages 1-26, September.
    5. Xin Guan & Naveed Ahmad & Muhammad Safdar Sial & Jacob Cherian & Heesup Han, 2023. "CSR and organizational performance: The role of pro‐environmental behavior and personal values," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(2), pages 677-694, March.

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