IDEAS home Printed from https://ideas.repec.org/a/wly/buseth/v34y2025i4p2259-2273.html

Influence of Corporate Digital Responsibility on Financial Performance: The Mediating Role of Firm Reputation

Author

Listed:
  • Stephen Oduro
  • Leul Girma Haylemariam
  • Rana Muhammad Umar

Abstract

This study examines the mediating role of firm reputation in the relationship between corporate digital responsibility (CDR) and financial performance in an emerging market, Ethiopia. An online cross‐sectional survey was used to collect data from 126 agricultural, manufacturing, and service firms. The study used partial least squares structural equation modeling (PLS‐SEM) to analyze the hypothesized relationship. Our findings reveal that the impact of CDR on financial performance is indirect only as firm reputation plays a full, complementary mediation role in the CDR—financial performance nexus. This implies that firms could leverage CDR as a competitive “inducing” strategy to enhance their firm reputation, which, in turn, can boost their financial prospects. Our study significantly contributes to the business ethics and digital economy literature by offering a pioneering empirical validation of the CDR phenomenon in an emerging context, thus extending the signaling and stakeholder theories to digitalization and reputation management domains. The findings offer managers fresh insight into the potential impact of a CDR strategy on firm reputation and financial performance, showing that firms can leverage CDR as a loss prevention strategy to gain a competitive advantage. Policymakers are therefore urged to promote soft‐law regimes and policies on CDR to motivate companies to leverage it as a competitive tool.

Suggested Citation

  • Stephen Oduro & Leul Girma Haylemariam & Rana Muhammad Umar, 2025. "Influence of Corporate Digital Responsibility on Financial Performance: The Mediating Role of Firm Reputation," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 34(4), pages 2259-2273, October.
    • Handle: RePEc:wly:buseth:v:34:y:2025:i:4:p:2259-2273
    DOI: 10.1111/beer.12766
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/beer.12766
    Download Restriction: no
    File URL: https://libkey.io/10.1111/beer.12766?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cowan, Kirsten & Guzman, Francisco, 2020. "How CSR reputation, sustainability signals, and country-of-origin sustainability reputation contribute to corporate brand performance: An exploratory study," Journal of Business Research, Elsevier, vol. 117(C), pages 683-693.
    2. Min Liu & Weijie Lu, 2021. "Corporate social responsibility, firm performance, and firm risk: the role of firm reputation," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 28(5), pages 525-545, September.
    3. Sana Noor & Abubakr Saeed & Muhammad Saad Baloch & Muhammad Awais, 2020. "CSR permanency, family ownership, and firm value: Evidence from emerging economies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(5), pages 2135-2149, September.
    4. Thorsten Koch & Josef Windsperger, 2017. "Seeing through the network: Competitive advantage in the digital economy," Journal of Organization Design, Springer;Organizational Design Community, vol. 6(1), pages 1-30, December.
    5. Yan Zhu & Li-Yun Sun & Alicia Leung, 2014. "Corporate social responsibility, firm reputation, and firm performance: The role of ethical leadership," Asia Pacific Journal of Management, Springer, vol. 31(4), pages 925-947, December.
    6. Cong Cheng & Mengxin Zhang, 2023. "Conceptualizing Corporate Digital Responsibility: A Digital Technology Development Perspective," Sustainability, MDPI, vol. 15(3), pages 1-21, January.
    7. Okazaki, Shintaro & Eisend, Martin & Plangger, Kirk & de Ruyter, Ko & Grewal, Dhruv, 2020. "Understanding the Strategic Consequences of Customer Privacy Concerns: A Meta-Analytic Review," Journal of Retailing, Elsevier, vol. 96(4), pages 458-473.
    8. Oduro, Stephen & De Nisco, Alessandro & Mainolfi, Giada, 2023. "Do digital technologies pay off? A meta-analytic review of the digital technologies/firm performance nexus," Technovation, Elsevier, vol. 128(C).
    9. Amira Khattak & Zahid Yousaf, 2021. "Digital Social Responsibility towards Corporate Social Responsibility and Strategic Performance of Hi-Tech SMEs: Customer Engagement as a Mediator," Sustainability, MDPI, vol. 14(1), pages 1-16, December.
    10. Sarstedt, Marko & Ringle, Christian M. & Smith, Donna & Reams, Russell & Hair, Joseph F., 2014. "Partial least squares structural equation modeling (PLS-SEM): A useful tool for family business researchers," Journal of Family Business Strategy, Elsevier, vol. 5(1), pages 105-115.
    11. Barton H. Hamilton & Jack A. Nickerson & Hideo Owan, 2003. "Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 465-497, June.
    12. Matthess, Marcel & Kunkel, Stefanie, 2020. "Structural change and digitalization in developing countries: Conceptually linking the two transformations," Technology in Society, Elsevier, vol. 63(C).
    13. Bonsón, Enrique & Bednárová, Michaela & Perea, David, 2023. "Disclosures about algorithmic decision making in the corporate reports of Western European companies," International Journal of Accounting Information Systems, Elsevier, vol. 48(C).
    14. Na Shen & Kevin Au & Weiwen Li, 2020. "Strategic alignment of intangible assets: The role of corporate social responsibility," Asia Pacific Journal of Management, Springer, vol. 37(4), pages 1119-1139, December.
    15. Muzhar Javed & Muhammad Amir Rashid & Ghulam Hussain & Hafiz Yasir Ali, 2020. "The effects of corporate social responsibility on corporate reputation and firm financial performance: Moderating role of responsible leadership," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1395-1409, May.
    16. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    17. Stephen Oduro & Alessandro De Nisco, 2023. "From Industry 4.0 adoption to innovation ambidexterity to firm performance: a MASEM analysis," European Journal of Innovation Management, Emerald Group Publishing Limited, vol. 27(8), pages 3060-3082, June.
    18. Stewart R. Miller & Lorraine Eden & Dan Li, 2020. "CSR Reputation and Firm Performance: A Dynamic Approach," Journal of Business Ethics, Springer, vol. 163(3), pages 619-636, May.
    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. Jiang, Yuanfang & Zheng, Xujun, 2026. "Digital media communication, FinTech, and corporate reputation," Finance Research Letters, Elsevier, vol. 88(C).

    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. Bashar Abu Khalaf & Munirah Sarhan AlQahtani & Maryam Saad Al-Naimi & Mohamad Anas Ktit, 2025. "Balancing Ethics and Earnings: Corporate Digital Responsibility and Jordanian Banks’ Performance Mediating for Bank Size," FinTech, MDPI, vol. 4(3), pages 1-25, July.
    2. Hussain Bux & Zhe Zhang & Adnan Ali, 2026. "Corporate social responsibility adoption for achieving economic, environmental, and social sustainability performance," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 28(2), pages 4545-4575, February.
    3. Stephen Oduro & Rana Muhammad Umar & Alfredo De Massis & Leul Girma Haylemariam, 2025. "Corporate social responsibility and family firm performance: A meta‐analytic review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(2), pages 1412-1443, March.
    4. Tu Thanh Hoai & Nguyen Phong Nguyen, 2022. "Internal Control Systems and Performance of Emerging Market Firms: The Moderating Roles of Leadership Consistency and Quality," SAGE Open, , vol. 12(3), pages 21582440221, September.
    5. Ali Uyar & Habiba Al-Shaer & Cemil Kuzey & Abdullah S. Karaman, 2026. "Board characteristics and aggressive CSR engagement: Do CSR committees provoke or restrain?," Review of Quantitative Finance and Accounting, Springer, vol. 66(1), pages 269-311, January.
    6. Queiroz, Maciel M. & Fosso Wamba, Samuel, 2019. "Blockchain adoption challenges in supply chain: An empirical investigation of the main drivers in India and the USA," International Journal of Information Management, Elsevier, vol. 46(C), pages 70-82.
    7. Shu-Yun Du & Xiao-Chen Shao & Alfredo Jiménez & Jeoung Yul Lee, 2022. "Corporate Social Responsibility of Chinese Multinational Enterprises: A Review and Future Research Agenda," Sustainability, MDPI, vol. 14(23), pages 1-22, December.
    8. Rizaldi Yusfiarto & Septy Setia Nugraha & Galuh Tri Pambekti & Annes Nisrina Khoirunnisa, 2023. "Building loyalty in Islamic banking relationship: a multiple mediation approach empirically in Indonesia," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(2), pages 306-320, June.
    9. Philip Siaw Kissi & Opoku Gyabaah & Vera Ami Ayitey, 2026. "Job autonomy-technology collaboration and digital disruption on job insecurity and its implication on employee health in aviation industry: moderation effect of emotional intelligence," SN Business & Economics, Springer, vol. 6(2), pages 1-31, February.
    10. Wasim ul Rehman & Faryal Jalil & Omur Saltik & Suleyman Degirmen & Mustafa Bekmezci, 2024. "Leveraging Strategic Innovation and Process Capabilities for Intellectual Capital Initiative Performance of Higher Education Institutes (HEIs): A Knowledge-Based Perspective," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 4161-4202, March.
    11. Muflih, Muhammad, 2021. "The link between corporate social responsibility and customer loyalty: Empirical evidence from the Islamic banking industry," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    12. M. Isabel Sánchez-Hernández & Tomás M. Bañegil-Palacios & Ramón Sanguino-Galván, 2017. "Competitive Success in Responsible Regional Ecosystems: An Empirical Approach in Spain Focused on the Firms’ Relationship with Stakeholders," Sustainability, MDPI, vol. 9(3), pages 1-18, March.
    13. Tendai Douglas Svotwa & Olumide Jaiyeoba & Mornay Roberts-Lombard & Charles Makanyeza, 2022. "Perceived Access to Finance, Entrepreneurial Self-Efficacy, Attitude Toward Entrepreneurship, Entrepreneurial Ability, and Entrepreneurial Intentions: A Botswana Youth Perspective," SAGE Open, , vol. 12(2), pages 21582440221, May.
    14. Astrachan, Claudia Binz & Patel, Vijay K. & Wanzenried, Gabrielle, 2014. "A comparative study of CB-SEM and PLS-SEM for theory development in family firm research," Journal of Family Business Strategy, Elsevier, vol. 5(1), pages 116-128.
    15. Sergio Camisón-Haba & José Antonio Clemente-Almendros & Tomás Gonzalez-Cruz, 2024. "RETRACTED ARTICLE: Connecting Human and Information Resources in the Generation of Competitive Advantage," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 19262-19293, December.
    16. Abhishek Behl & Brinda Sampat & Sahil Raj, 2025. "An empirical investigation of repeated donations on crowdfunding platforms during COVID-19," Annals of Operations Research, Springer, vol. 348(3), pages 1849-1877, May.
    17. Ismael Barros-Contreras & Héctor Pérez-Fernández & Natalia Martín-Cruz & Juan Hernangómez B., 2023. "Can we make family social capital flourish? The moderating role of generational involvement," Journal of Family and Economic Issues, Springer, vol. 44(3), pages 655-673, September.
    18. Limin Zhang & Fei Gu & Mingke He, 2024. "The Influence of Digital Transformation on the Reconfigurability and Performance of Supply Chains: A Study of the Electronic, Machinery, and Home Appliance Manufacturing Industries in China," Sustainability, MDPI, vol. 16(7), pages 1-22, March.
    19. Saumyaranjan Sahoo & Suresh Kumar Jakhar, 2024. "Industry 4.0 deployment for circular economy performance—Understanding the role of green procurement and remanufacturing activities," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 1144-1160, February.
    20. Chao‐Hung Wang & Wei‐Jr Juo, 2024. "Sustainable environmental performance: The mediating role of green reputation in the choice of green marketing or green demarketing," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 1756-1768, May.

    More about this item

    Statistics

    Access and download statistics

    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:wly:buseth:v:34:y:2025:i:4:p:2259-2273. 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: Wiley Content Delivery (email available below). General contact details of provider: https://onlinelibrary.wiley.com/journal/26946424 .

    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.