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The Impact of Social Responsibility on Corporate Performance: Evidence from Taiwan

Author

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  • Yun-Chia Yan
  • Li-Chuan Chou
  • Ta-Cheng Chang
  • John Darcy

Abstract

Prior studies show a mixed relation between corporate social responsibility (CSR) and corporate financial performance (CFP). This paper attempts to address the issue by using listing companies from Taiwan during 2007-2010. Contrary to prior studies that use qualitative approaches to construct a CSR index, in order to examine the relation between CSR and CFP this study directly adopts the CSR score with a scale from zero to 100 points from the CSRHub database of companies’ social, environmental, and governance performance. We find that (1) there is a positive and significant interaction between CSR and CFP, (2) high score CSR firms tend to outperform low score CSR firms and (3) the governance dimension of CSR has a more significant and positive association with stock price returns than other dimensions (community, employees, and environment) of CSR. Our results, therefore, provide additional information regarding the relation between CSR and CFP within the context of emerging markets.

Suggested Citation

  • Yun-Chia Yan & Li-Chuan Chou & Ta-Cheng Chang & John Darcy, 2017. "The Impact of Social Responsibility on Corporate Performance: Evidence from Taiwan," Accounting and Finance Research, Sciedu Press, vol. 6(2), pages 181-181, May.
    • Handle: RePEc:jfr:afr111:v:6:y:2017:i:2:p:181
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    References listed on IDEAS

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    1. Abagail McWilliams & Donald Siegel, 2000. "Corporate social responsibility and financial performance: correlation or misspecification?," Strategic Management Journal, Wiley Blackwell, vol. 21(5), pages 603-609, May.
    2. Lin, Chin-Huang & Yang, Ho-Li & Liou, Dian-Yan, 2009. "The impact of corporate social responsibility on financial performance: Evidence from business in Taiwan," Technology in Society, Elsevier, vol. 31(1), pages 56-63.
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    Cited by:

    1. Agus Munandar & Akhmad Syakhroza & Dwi Martani & Dodik Siswantoro, 2020. "How Corporate Social Responsibility Affects Accounting Performance: A Cross-Country Analysis," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 10(3), pages 81-89.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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