Corporate Social Responsibility: Motives and Financial Performance

Muhannad Atmeh, Mohammad Shaban and Malek Alsharairi
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Muhannad Atmeh: School of Management and Logistic Sciences, German Jordanian University, Madaba 11180, Jordan
Mohammad Shaban: School of Management and Logistic Sciences, German Jordanian University, Madaba 11180, Jordan
Malek Alsharairi: School of Management and Logistic Sciences, German Jordanian University, Madaba 11180, Jordan

IJFS, 2020, vol. 8, issue 4, 1-17

Abstract: The relationship between companies and society has been questioned for a long time. However, the effect of the motives behind CSR regarding the companies’ actual engagement with CSR has received little attention, especially in emerging markets. This paper tackles this issue for the first time using a sample of Jordanian companies. We explore the effect of two types of motives on the level of engagement in CSR: extrinsic motive (financial) and intrinsic motives (ethical and altruistic). The relationship between the company’s actual financial performance and CSR is also investigated. Primary data were collected using a questionnaire, distributed to Jordanian company’s managers in five sectors: pharmaceutical, technology and telecommunication, construction, farming, and financial services. Multiple regression analysis was conducted to depict the relationships. Results show that the intrinsic motives have a significant effect on CSR, while the extrinsic motive has none. When intrinsic motives were tested separately, results showed that the ethical motive had a significant effect, while the altruistic had no effect. In both cases, CSR was shown to be more significantly driven by the company’s financial performance. Different stakeholders such as policymakers, entrepreneurs, researchers, and investors may use the results of this study to increase companies’ involvement in CSR.

Keywords: corporate social responsibility (CSR); extrinsic motives; intrinsic motives; financial performance (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2020
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