Corporate social responsibility and corporate financial performance: Evidence from Korea

Jong-Seo Choi, Young-Min Kwak and Chongwoo Choe
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Jong-Seo Choi: College of Business, Pusan National University, South Korea
Young-Min Kwak: College of Business, Pusan National University, South Korea

Australian Journal of Management, 2010, vol. 35, issue 3, 291-311

Abstract: This paper studies the empirical relation between corporate social responsibility (CSR) and corporate financial performance in Korea using a sample of 1222 firm-years during 2002—2008. We measure corporate social responsibility by both an equal-weighted CSR index and a stakeholder-weighted CSR index suggested by Akpinar et al. (2008). Corporate financial performance is measured by return on equity, return on assets, and Tobin’s Q. We find a positive and significant relationship between corporate financial performance and the stakeholder-weighted CSR index, but not the equal-weighted CSR index. This finding is robust to alternative model specifications and several additional tests, providing evidence in support of instrumental stakeholder theory.

Keywords: corporate financial performance; corporate social responsibility; instrumental stakeholder theory; KEJI index (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (71)

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Working Paper: Corporate Social Responsibility and Corporate Financial Performance: Evidence from Korea (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:35:y:2010:i:3:p:291-311

DOI: 10.1177/0312896210384681

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