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From driver to enabler: the moderating effect of corporate social responsibility on firm performance

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  • Tian Lan
  • Yu Chen
  • Huafang Li
  • Lijia Guo
  • Jiashun Huang

Abstract

Corporate social responsibility (CSR) is assumed to have a direct influence on firm performance. However, the existing literature provides a mixed depiction of the relationship between CSR and firm performance. In this study, CSR is considered as an enabler for firm performance, rather than a direct driving force. Using a sample of U.S. firms, we test the enabler hypothesis and find that CSR positively moderates the relationship between marketing investments and firm financial performance, i.e., the enabling hypothesis is supported. The moderating effect of CSR is further moderated by how firms treat their employees. Mistreating employees weakens CSR’s moderating effect because it may make customers to perceive CSR activities as self-interested makeups rather than purely charitable actions in nature. Overall, our study suggests a logic shift from considering CSR as a driver for firm performance to an enabler and provides implications for both future research and practices.

Suggested Citation

  • Tian Lan & Yu Chen & Huafang Li & Lijia Guo & Jiashun Huang, 2021. "From driver to enabler: the moderating effect of corporate social responsibility on firm performance," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 34(1), pages 2240-2262, January.
    • Handle: RePEc:taf:reroxx:v:34:y:2021:i:1:p:2240-2262
    DOI: 10.1080/1331677X.2020.1862686
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    Cited by:

    1. Li, Biao & Mousa, Saeed & Reinoso, Johanna Rosali Reyes & Alzoubi, Haitham M. & Ali, Anis & Hoang, Anh Duong, 2023. "The role of technology innovation, customer retention and business continuity on firm performance after post-pandemic era in China’s SMEs," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1209-1220.
    2. Edward Fosu & Kaigang Yi & Deborah Asiedu, 2024. "The effect of CSR on corporate social performance: Mediating role of corporate image, green innovation and moderating role of corporate identity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 69-88, January.

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