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Corporate Social Responsibility and Corporate Financial Performance: Evidence from Korea

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  • Choi, Jong-Seo
  • Kwak, Young-Min
  • Choe, Chongwoo

Abstract

This 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.

Suggested Citation

  • Choi, Jong-Seo & Kwak, Young-Min & Choe, Chongwoo, 2010. "Corporate Social Responsibility and Corporate Financial Performance: Evidence from Korea," MPRA Paper 22159, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:22159
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    References listed on IDEAS

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    More about this item

    Keywords

    corporate social responsibility; corporate financial performance; KEJI index; instrumental stakeholder theory;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - 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

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