A Theoretical Framework for the Mediation Analysis on the Relationship Between Corporate Social Responsibility and Financial Performance

Esti Dwi Rinawiyanti ()
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Esti Dwi Rinawiyanti: University of Surabaya, Study Program of Industrial Engineering, Faculty of Engineering

A chapter in Proceedings of the 4th Asia Pacific Management Research Conference (APMRC 2022), 2023, pp 720-730 from Springer

Abstract: Abstract Several studies have investigated the impact of corporate social responsibility (CSR) on financial performance (FP). However, little research has been done on how CSR affects non-financial performance and how this performance mediates the CSR-FP relationship. This study aims to develop a theoretical framework for the relationship between CSR and company performance, as well as to analyze a mediating effect on the CSR-FP relationship. Stakeholder theory is employed to emphasize the importance of incorporating the interests of key internal and external stakeholders, including employees and customers, into CSR practices. The theoretical framework describes CSR in four areas: economic, legal, ethical, and philanthropic responsibilities. The impact of CSR is measured not just in terms of FP, but also in terms of customer, employee, and operational performance. The remaining three performances are then evaluated to see if they mediate the impact of CSR on FP. Seven propositions are proposed in the framework, each of which can be tested using survey data. As a result, the framework presented in this paper can be used to assess the impact of CSR on both financial and non-financial performance, as well as to investigate the mediating effect of non-financial performance on the CSR-FP relationship.

Keywords: CSR Practices; Mediating Effect; Operational Performance; Stakeholder (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-076-3_55

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DOI: 10.2991/978-94-6463-076-3_55

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