Corporate Social Responsibility and Firm Financial Performance: The Mediating Role of Productivity

Iftekhar Hasan, Nada Kobeissi (), Liuling Liu () and Haizhi Wang ()
Additional contact information
Nada Kobeissi: Long Island University-C.W. Post
Liuling Liu: Bowling Green State University
Haizhi Wang: Illinois Institute of Technology

Journal of Business Ethics, 2018, vol. 149, issue 3, No 8, 688 pages

Abstract: Abstract This study treats firm productivity as an accumulation of productive intangibles and posits that stakeholder engagement associated with better corporate social performance helps develop such intangibles. We hypothesize that because shareholders factor improved productive efficiency into stock price, productivity mediates the relationship between corporate social and financial performance. Furthermore, we argue that key stakeholders’ social considerations are more valuable for firms with higher levels of discretionary cash and income stream uncertainty. Therefore, we hypothesize that those two contingencies moderate the mediated process of corporate social performance with financial performance. Our analysis, based on a comprehensive longitudinal dataset of the U.S. manufacturing firms from 1992 to 2009, lends strong support for these hypotheses. In short, this paper uncovers a productivity-based, context-dependent mechanism underlying the relationship between corporate social performance and financial performance.

Keywords: Corporate social responsibility; Corporate financial performance; Total factor productivity; Stakeholder management; Discretionary cash; Organizational risk (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (80)

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Working Paper: Corporate social responsibility and firm financial performance: the mediating role of productivity (2016)
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DOI: 10.1007/s10551-016-3066-1

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