Industry and Stakeholder Impacts on Corporate Social Responsibility (CSR) and Financial Performance: Consumer vs. Industrial Sectors

Adam Arian, John Sands () and Stuart Tooley
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Adam Arian: School of Business, Faculty of BELA, Toowoomba Campus, University of Southern Queensland, West Street, Toowoomba, QD 4350, Australia
John Sands: School of Business, Faculty of BELA, Toowoomba Campus, University of Southern Queensland, West Street, Toowoomba, QD 4350, Australia
Stuart Tooley: School of Business and Law, Brisbane Campus, Central Queensland University, Rockhampton, QD 4701, Australia

Sustainability, 2023, vol. 15, issue 16, 1-21

Abstract: We examine the longitudinal relationship between corporate social responsibility (CSR) performance and financial performance by investigating attributes among firms operating in different industry sectors longitudinally. Using panel regression analysis on Australian publicly listed firms from 2007 to 2021, we find that CSR performance positively influences financial performance. Furthermore, our industry-specific analysis uncovers notable distinctions. Specifically, within the consumer product markets, including recreational facilities, travel and tourism, lodging, dining, and leisure products, firms benefit from stakeholder rewards for their CSR efforts, leading to sustained financial gains. However, this positive association is absent for firms operating in industrial product markets, where stakeholders do not offer similar rewards for CSR performance. The significance of stakeholder engagement becomes evident in consumer market sectors, as firms with higher levels of CSR performance secure stakeholder support, resulting in superior long-term financial performance. Our findings contribute to the existing CSR literature and offer practical insights and implications for managers operating in diverse product market industries, including the dynamic field of tourism and hospitality seeking to harness CSR performance, meet stakeholder expectations, and achieve financial advantages.

Keywords: financial performance; corporate social responsibility; stakeholder pressure; sustainable development (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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