Do Employees Matter in the Relationship between Corporate Social Responsibility and Financial Performance?

Jae Mee Yoo, Woojae Choi and Mi Lim Chon
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Jae Mee Yoo: School of Business Administration, Cheongju University, Cheongju 28503, Korea
Woojae Choi: School of Business Administration, Cheongju University, Cheongju 28503, Korea
Mi Lim Chon: School of Business Administration, Cheongju University, Cheongju 28503, Korea

Sustainability, 2019, vol. 11, issue 22, 1-13

Abstract: This study investigated the mechanism behind the impact of corporate social responsibility (CSR) on firms’ financial performance while focusing on internal stakeholders. Although many studies have examined the effects of CSR few has empirically investigated the underlying process of the mechanism. In addition, previous research has rarely regarded employees as a link between CSR and firms’ outcomes, despite employees implementing CSR policies. This study explored the pathway of the CSR-employees-firm’s performance. Employee commitment was used to explain the relationship between CSR and performance, since it is an important employee-associated micro-level outcome of CSR. The results showed that CSR indirectly influenced a firm’s accounting profitability through enhanced employee commitment, as well as directly affected firm’s profitability. CSR increases employee commitment, which in turn leads to improvements in a firm’s accounting returns. The paper suggests that employees should be considered as an important agent for the effects of CSR initiatives.

Keywords: CSR; employee commitment; financial performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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