The interplay of CSR, stakeholder interest management, capital budgeting, and firm performance

Ahmed Hunjra (), Murugesh Arunachalam, Peter Verhoeven, Sisira Colombage and Elie Bouri

Journal of Behavioral and Experimental Finance, 2024, vol. 43, issue C

Abstract: This study examines the perspectives of corporate managers regarding corporate social responsibility (CSR), stakeholder interest management, firm performance, and their preferences in capital budgeting. It uses structural equation modelling (SEM) to test hypotheses. The analysis shows that capital budgeting serves as a mediator, diminishing the direct relationship between CSR and firm performance, and between the management of stakeholder interests and firm performance. The findings indicate that instrumental motives guide corporate managers in their capital budgeting decisions. The paper challenges perspectives that disproportionately emphasize the benevolent and moral dimensions of CSR, highlighting the significance of stakeholder interest management as a credible and essential business practice.

Keywords: Capital budgeting; CSR; Stakeholder interest management; Firm performance; Instrumental & benevolent motives; Mediating factors (search for similar items in EconPapers)
JEL-codes: C30 G30 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:43:y:2024:i:c:s2214635024000820

DOI: 10.1016/j.jbef.2024.100967

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