CSR and firm performance nexus in a highly unstable political context: institutional influence and community cohesion

Islam Abdeljawad, Mamunur Rashid, Nour Abdul-Rahman Arafat, Hadeel Naifeh and Nadeen Ghanem

International Journal of Business Governance and Ethics, 2024, vol. 18, issue 6, 678-701

Abstract: We provide evidence of the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) in Palestine, a highly unstable political context. Annual reports of all firms listed on the Palestine Exchange (PEX) for the period 2016-2019 were manually content analysed. A checklist of reported CSR items is summarised into four areas: environmental information, human resources, community involvement, and product and customer service quality. Results indicate a robust positive connection between each of the four dimensions and the composite CSR index with three performance indicators: ROA, ROE, and Tobin's Q. Results also find better performing companies with a higher degree of community involvement being greatly appealing, while the environmental dimension was the least resilient. We discuss the significance of community engagement for an unstable context like Palestine from a 'community cohesion' standpoint.

Keywords: corporate social responsibility; CSR; corporate financial performance; CFP; unstable economies; small economies; Palestine. (search for similar items in EconPapers)
Date: 2024
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