Corporate Social Responsibility and Corporate Financial Performance: Evidence from Korea
AbstractThis paper studies the empirical relation between corporate social responsibility (CSR) and corporate financial performance in Korea using a sample of 1122 firm-years during 2002-2008. We measure corporate social responsibility by both an equal-weighted CSR index and a stakeholder-weighted CSR index suggested by Akpinar et al. (2008). Corporate financial performance is measured by ROE, ROA and Tobin’s Q. We find a positive and significant relation between corporate financial performance and the stakeholder-weighted CSR index, but not the equal-weighted CSR index. This finding is robust to alternative model specifications and several additional tests, providing evidence in support of instrumental stakeholder theory.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 22159.
Date of creation: 17 Apr 2010
Date of revision:
corporate social responsibility; corporate financial performance; KEJI index; instrumental stakeholder theory;
Find related papers by JEL classification:
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-24 (All new papers)
- NEP-BEC-2010-04-24 (Business Economics)
- NEP-CSE-2010-04-24 (Economics of Strategic Management)
- NEP-EFF-2010-04-24 (Efficiency & Productivity)
- NEP-SOC-2010-04-24 (Social Norms & Social Capital)
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