Does Corporate Social Responsibility (CSR) affect Financial Performance and Market Value? An Evidence from Banking Industry of Bangladesh

Anik Mitra and Abm Absar Hamid
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Anik Mitra: Department of Business Administration, Louisiana Tech University, Ruston, Louisiana, United States of America.
Abm Absar Hamid: Department of Business Administration, Army Institute of Business Administration, Sylhet-3104, Bangladesh.

International Journal of Science and Business, 2025, vol. 48, issue 1, 1-13

Abstract: Corporate Social Responsibility has grown into a fundamental concept in the corporate world, reflecting how companies integrate environmental, social, and governance (ESG) aspects into their decision-making processes. The goal of the research is to analyze the impact of CSR on both financial performance and market value. Banks of Bangladesh prepare a handsome budget for CSR activities, and this study's aim is to explore the impact that CSR has on the market value and financial performance of banks. The dependent variables are Return on Equity (ROE) and Tobin’s Q. ROE is used for the purpose of evaluating financial performance, whereas Tobin's Q is used for the purpose of evaluating market value. This study used time series data for the period of 2017-2021 of 23 banks listed on the Dhaka Stock Exchange (DSE). Linear regression analysis is used to know the relationship. This study revealed a positive relation between CSR and financial performance, although it was not deemed statistically significant. There is a positive and strong relationship between CSR and market value. The allocation of an organization's CSR funds contributes to the enhancement of their financial performance and a boost of their market value.

Keywords: Corporate Social Responsibility; Financial Performance; Market Value; Return on Equity; Tobin’s Q (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:aif:journl:v:48:y:2025:i:1:p:1-13

DOI: 10.58970/IJSB.2621

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