The Controversial Link between CSR and Financial Performance: The Mediating Role of Green Innovation

Saeid Homayoun (), Bita Mashayekhi (), Amin Jahangard, Milad Samavat and Zabihollah Rezaee
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Saeid Homayoun: Department of Economics and Business Studies, University of Gavle, 80176 Gavle, Sweden
Bita Mashayekhi: Department of Accounting and Auditing, Faculty of Management, University of Tehran, Tehran 1411713114, Iran
Amin Jahangard: Department of Accounting and Auditing, Faculty of Management, University of Tehran, Tehran 1411713114, Iran
Milad Samavat: Department of Accounting and Auditing, Faculty of Management, University of Tehran, Tehran 1411713114, Iran
Zabihollah Rezaee: Crews School of Accountancy, Fogelman College of Business and Economics, University of Memphis, Memphis, TN 38152, USA

Sustainability, 2023, vol. 15, issue 13, 1-15

Abstract: The contentious relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) has been extensively and yet inconclusively debated in the sustainability literature. We further investigate the link between CSR and CFP by examining the mediating role of green innovation performance (GIP). We perform pooled ordinary least squares (OLS) analysis on a panel data of UK firms from 2006 to 2017 provided by the ASSET4 database. We find that CSR is positively and significantly associated with CFP and that GIP plays a significant and positive mediating role in this relationship. Our findings contribute to the extant sustainability literature by using a comprehensive measure of CFP and addressing the mediating effects of GIP on the link between CSR and CFP. The results provide policy, practice, and research implications as investors demand more robust CSR information, regulators establish environmental and climate change rules, and companies focus on the efficiency and effectiveness of their green innovation practices and performance.

Keywords: CSR; ESG; green innovation; corporate financial performance (CFP) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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