How Does CSR Activity Affect Sustainable Growth and Value of Corporations? Evidence from Korea

Kyungtag Lee and Hyunchul Lee
Additional contact information
Kyungtag Lee: School of Business, Yeungnam University, 280 Daehakro, Gyeongsangbukdo, Gyeongsansi 38541, Korea
Hyunchul Lee: Division of Business Administration, Chosun University, 309 Pilmundaero, Donggu, Gwangju 61452, Korea

Sustainability, 2019, vol. 11, issue 2, 1-11

Abstract: This study explores the relationship between Korean listed companies’ corporation social responsibility (CSR) activities and their sustainable growth and valuation, focusing specifically on the nonlinear aspect. The nonlinear quantile regressions used in this study reported that CSR activities increased corporation value exclusively in the middle-range groups (i.e., τ _25, τ _50, τ _75) of Tobin’s q, a proxy for corporation growth and value. However, the linear ordinary least squares (OLS) regression did not indicate similar results. Our findings also showed that CSR activities affect the valuation of Korean listed corporations in a nonlinear, rather than in a linear way. Considering that most prior studies are devoted to reporting linear results from classical ordinary least squares estimations between CSR activities and corporation value, our study fills the gap in the literature. The findings of this study may provide corporation managers and researchers with valuable data concerning a corporation’s optimal investment point for their CSR activities for sustainable growth and the maximization of corporation value.

Keywords: CSR; Tobin’s q; corporation value; corporation growth; sustainability; nonlinearity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/2/508/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/2/508/ (text/html)

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:gam:jsusta:v:11:y:2019:i:2:p:508-:d:199058

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().