IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i18p9996-d630315.html
   My bibliography  Save this article

Employee Satisfaction, Corporate Social Responsibility and Financial Performance

Author

Listed:
  • Chu-Hsuan Chang

    (Department of Finance, National Taipei University of Business, Taipei 10026, Taiwan)

  • Hsiou-Wei Lin

    (Department of International Business, National Taiwan University, Taipei 10617, Taiwan)

  • Wen-Hsien Tsai

    (Department of Business Administration, National Central University, Jhongli, Taoyuan 32001, Taiwan)

  • Wei-Liang Wang

    (Department of Business Administration, National Central University, Jhongli, Taoyuan 32001, Taiwan)

  • Cheng-Tsu Huang

    (Department of Business Administration, National Central University, Jhongli, Taoyuan 32001, Taiwan)

Abstract

This study explores the extent to which employee turnover, a proxy variable to employee loyalty, helps mediate the relationship between Taiwanese firms’ corporate social responsibility (CSR) performance and financial outcome. The results show that a firm’s CSR performance is negatively correlated with employee turnover and turnover variability, and moreover, employee turnover is negatively correlated with a firm’s financial performance. The result is especially noteworthy for studies regarding Taiwanese companies since quite a few of them are original equipment manufacturers (hereafter also referred to as OEMs), of intermediate goods. For the sample firms, although the contribution of social responsibility appears to have insignificantly direct benefit on financial performance, we document that the extent to which CSR conducts influence on long-term financial outcomes may be moderated and mediated by employee enthusiasm.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:18:p:9996-:d:630315
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/18/9996/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/18/9996/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sandra A. Waddock & Samuel B. Graves, 1997. "The Corporate Social Performance–Financial Performance Link," Strategic Management Journal, Wiley Blackwell, vol. 18(4), pages 303-319, April.
    2. Edwin Mirfazli, 2008. "Evaluate corporate social responsibility disclosure at Annual Report Companies in multifarious group of industry members of Jakarta Stock Exchange (JSX), Indonesia," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 4(3), pages 388-406, August.
    3. Gary B. Gorton & Jillian Grennan & Alexander K. Zentefis, 2022. "Corporate Culture," Annual Review of Financial Economics, Annual Reviews, vol. 14(1), pages 535-561, November.
    4. Chieh-Peng Lin & Nyan-Myau Lyau & Yuan-Hui Tsai & Wen-Yung Chen & Chou-Kang Chiu, 2010. "Modeling Corporate Citizenship and Its Relationship with Organizational Citizenship Behaviors," Journal of Business Ethics, Springer, vol. 95(3), pages 357-372, September.
    5. 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.
    6. Luigi Zingales, 2000. "In Search of New Foundations," Journal of Finance, American Finance Association, vol. 55(4), pages 1623-1653, August.
    7. Zeynep Ton & Robert S. Huckman, 2008. "Managing the Impact of Employee Turnover on Performance: The Role of Process Conformance," Organization Science, INFORMS, vol. 19(1), pages 56-68, February.
    8. Caroline Flammer & Jiao Luo, 2017. "Corporate social responsibility as an employee governance tool: Evidence from a quasi-experiment," Strategic Management Journal, Wiley Blackwell, vol. 38(2), pages 163-183, February.
    9. Sang Jun Cho & Chune Young Chung & Jason Young, 2019. "Study on the Relationship between CSR and Financial Performance," Sustainability, MDPI, vol. 11(2), pages 1-26, January.
    10. Timothy Gubler & Ian Larkin & Lamar Pierce, 2016. "Motivational Spillovers from Awards: Crowding Out in a Multitasking Environment," Organization Science, INFORMS, vol. 27(2), pages 286-303, April.
    11. Jintae Kim & Kangho Cho & Cheong K. Park, 2019. "Does CSR Assurance Affect the Relationship between CSR Performance and Financial Performance?," Sustainability, MDPI, vol. 11(20), pages 1-12, October.
    12. Abraham Carmeli & Gershon Gilat & David A. Waldman, 2007. "The Role of Perceived Organizational Performance in Organizational Identification, Adjustment and Job Performance," Journal of Management Studies, Wiley Blackwell, vol. 44(6), pages 972-992, September.
    13. Lee, Eun Mi & Park, Seong-Yeon & Lee, Hyun Jung, 2013. "Employee perception of CSR activities: Its antecedents and consequences," Journal of Business Research, Elsevier, vol. 66(10), pages 1716-1724.
    14. Huang, Minjie & Li, Pingshu & Meschke, Felix & Guthrie, James P., 2015. "Family firms, employee satisfaction, and corporate performance," Journal of Corporate Finance, Elsevier, vol. 34(C), pages 108-127.
    15. Milton Friedman, 2007. "The Social Responsibility of Business Is to Increase Its Profits," Springer Books, in: Walther Ch Zimmerli & Markus Holzinger & Klaus Richter (ed.), Corporate Ethics and Corporate Governance, pages 173-178, Springer.
    16. Chin-Shien Lin & Ruei-Yuan Chang & Van Thac Dang, 2015. "An Integrated Model to Explain How Corporate Social Responsibility Affects Corporate Financial Performance," Sustainability, MDPI, vol. 7(7), pages 1-20, June.
    17. Linda Argote & Sara L. Beckman & Dennis Epple, 1990. "The Persistence and Transfer of Learning in Industrial Settings," Management Science, INFORMS, vol. 36(2), pages 140-154, February.
    18. Jordi Surroca & Josep A. Tribó & Sandra Waddock, 2010. "Corporate responsibility and financial performance: the role of intangible resources," Strategic Management Journal, Wiley Blackwell, vol. 31(5), pages 463-490, May.
    19. Amy J. Hillman & Gerald D. Keim, 2001. "Shareholder value, stakeholder management, and social issues: what's the bottom line?," Strategic Management Journal, Wiley Blackwell, vol. 22(2), pages 125-139, February.
    20. Jacob Cherian & Muhammad Umar & Phung Anh Thu & Thao Nguyen-Trang & Muhammad Safdar Sial & Nguyen Vinh Khuong, 2019. "Does Corporate Social Responsibility Affect the Financial Performance of the Manufacturing Sector? Evidence from an Emerging Economy," Sustainability, MDPI, vol. 11(4), pages 1-14, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen-Yueh Chen & Ya-Lun Chou & Chun-Shih Lee, 2021. "Social Innovation, Employee Value Cocreation, and Organizational Citizenship Behavior in a Sport-Related Social Enterprise: Mediating Effect of Corporate Social Responsibility," Sustainability, MDPI, vol. 13(22), pages 1-10, November.
    2. Jiangjun Li & Tao Fu & Shengyue Han & Rui Liang, 2023. "Exploring the Impact of Corporate Social Responsibility on Financial Performance: The Moderating Role of Media Attention," Sustainability, MDPI, vol. 15(6), pages 1-16, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olivier Meier & Philippe Naccache & Guillaume Schier, 2021. "Exploring the Curvature of the Relationship Between HRM–CSR and Corporate Financial Performance," Journal of Business Ethics, Springer, vol. 170(4), pages 857-873, May.
    2. Jeong, Nara & Kim, Nari & Arthurs, Jonathan D., 2021. "The CEO’s tenure life cycle, corporate social responsibility and the moderating role of the CEO’s political orientation," Journal of Business Research, Elsevier, vol. 137(C), pages 464-474.
    3. Hong Zhao & Wei Du & Hao Shen & Xinting Zhen, 2021. "Corporate Social Responsibility and Bond Price at Issuances: U.S. Evidence," Sustainability, MDPI, vol. 13(23), pages 1-16, November.
    4. Saeid Homayoun & Bita Mashayekhi & Amin Jahangard & Milad Samavat & Zabihollah Rezaee, 2023. "The Controversial Link between CSR and Financial Performance: The Mediating Role of Green Innovation," Sustainability, MDPI, vol. 15(13), pages 1-15, July.
    5. Jintae Kim & Kangho Cho & Cheong K. Park, 2019. "Does CSR Assurance Affect the Relationship between CSR Performance and Financial Performance?," Sustainability, MDPI, vol. 11(20), pages 1-12, October.
    6. Magdalena Kludacz-Alessandri & Małgorzata Cygańska, 2021. "Corporate Social Responsibility and Financial Performance among Energy Sector Companies," Energies, MDPI, vol. 14(19), pages 1-16, September.
    7. Franck Brulhart & Sandrine Gherra & Bertrand V. Quelin, 2019. "Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?," Journal of Business Ethics, Springer, vol. 158(1), pages 25-46, August.
    8. Yue Vaughan & Yinyoung Rhou & Yoon Koh & Manisha Singal, 2024. "Slack resources and employee-centered corporate social responsibility in restaurant companies," Tourism Economics, , vol. 30(3), pages 592-614, May.
    9. Timothy Gubler & Ian Larkin & Lamar Pierce, 2018. "Doing Well by Making Well: The Impact of Corporate Wellness Programs on Employee Productivity," Management Science, INFORMS, vol. 64(11), pages 4967-4987, November.
    10. Mingchuan Yu & Han Lin & Greg G. Wang & Yuan Liu & Xiaotao Zheng, 2022. "Is too much as bad as too little? The S-curve relationship between corporate philanthropy and employee performance," Asia Pacific Journal of Management, Springer, vol. 39(4), pages 1511-1534, December.
    11. Hans B. Christensen & Luzi Hail & Christian Leuz, 2021. "Mandatory CSR and sustainability reporting: economic analysis and literature review," Review of Accounting Studies, Springer, vol. 26(3), pages 1176-1248, September.
    12. Symitsi, Efthymia & Stamolampros, Panagiotis & Daskalakis, George & Korfiatis, Nikolaos, 2021. "The informational value of employee online reviews," European Journal of Operational Research, Elsevier, vol. 288(2), pages 605-619.
    13. Li, John, 2022. "The effect of employee satisfaction on effective corporate tax planning: Evidence from Glassdoor," Advances in accounting, Elsevier, vol. 57(C).
    14. Sandra Escamilla-Solano & Antonio Fernández-Portillo & Jessica Paule-Vianez & Paola Plaza-Casado, 2019. "Effect of the Disclosure of Corporate Social Responsibility on Business Profitability. A Dimensional Analysis in the Spanish Stock Market," Sustainability, MDPI, vol. 11(23), pages 1-17, November.
    15. Ngoc Phu Tran & Co Thi Huyen Dinh & Hien Thi Thu Hoang & Duc Hong Vo, 2022. "Intellectual Capital and Firm Performance in Vietnam: The Moderating Role of Corporate Social Responsibility," Sustainability, MDPI, vol. 14(19), pages 1-13, October.
    16. Zhu, Minghao & Yeung, Andy C.L. & Zhou, Honggeng, 2021. "Diversify or concentrate: The impact of customer concentration on corporate social responsibility," International Journal of Production Economics, Elsevier, vol. 240(C).
    17. Elena Platonova & Mehmet Asutay & Rob Dixon & Sabri Mohammad, 2018. "The Impact of Corporate Social Responsibility Disclosure on Financial Performance: Evidence from the GCC Islamic Banking Sector," Journal of Business Ethics, Springer, vol. 151(2), pages 451-471, August.
    18. Stankevičiūtė Živilė & Wereda Wioletta, 2020. "Universalism values and organisational citizenship behaviour referring to employee perception of corporate social responsibility," Management & Marketing, Sciendo, vol. 15(2), pages 302-325, June.
    19. Francisco Javier Forcadell & Antonio Lorena & Elisa Aracil, 2023. "The firm under the spotlight: How stakeholder scrutiny shapes corporate social responsibility and its influence on performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1258-1272, May.
    20. Min-Jik Kim & Byung-Jik Kim, 2021. "The Performance Implication of Corporate Social Responsibility: The Moderating Role of Employee’s Prosocial Motivation," IJERPH, MDPI, vol. 18(6), pages 1-14, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:18:p:9996-:d:630315. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.