EconPapers    
Economics at your fingertips  
 

The impact of corporate social responsibility on employee performance and cost

Li Sun and T. Robert Yu

Review of Accounting and Finance, 2015, vol. 14, issue 3, 262-284

Abstract: Purpose - – The purpose of our paper is to empirically examine the conjectures, which prior literature suggests, that employees work more productively in socially responsible companies and employees are willing to work for less when they work for these companies. Design/methodology/approach - – This study uses ordinary least squares regression to examine the relationship between corporate social responsibility (CSR) and employee performance and between CSR and employee cost. Further, 2SLS is used to address the endogeneity issue. Findings - – The results indicate a positive relation between CSR and employee performance, suggesting that employees in socially responsible companies generate better operating performance than their peers in less socially responsible companies. Findings also reveal that socially responsible companies incur higher labor cost. Research limitations/implications - – First, the CSR ratings constructed by KLD Inc. are an approximate measure of CSR performance. Better CSR measures may yield stronger results. Additionally, the sample firms in our study are relatively large firms. Caution needs be exercised when readers generalize these conclusions. Finally, this sample only consists of public firms. Whether these conclusions hold in private firms remains unknown. The above issues can be investigated in future studies. Practical implications - – The findings of our study should interest managers who contemplate engaging in socially responsible activities, investors and financial analysts who assess firm performance and policymakers who design and implement guidelines on CSR programs. Originality/value - – This is the first paper that directly tests the association between CSR and employee performance and cost. Thus, this study contributes to the CSR literature by offering evidence to show a positive effect of CSR on employee performance. It also contributes to the management accounting literature.

Keywords: CSR; Employee; Corporate social responsibility; Employee performance; Employee cost (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
http://www.emeraldinsight.com/10.1108/RAF-03-2014- ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:rafpps:v:14:y:2015:i:3:p:262-284

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://emeraldgroupp ... /journals.htm?id=raf

Access Statistics for this article

Review of Accounting and Finance is currently edited by C Janie Chang and Janis Zaima

More articles in Review of Accounting and Finance from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().

 
Page updated 2021-09-11
Handle: RePEc:eme:rafpps:v:14:y:2015:i:3:p:262-284