EFFECTS OF CORPORATE SOCIAL RESPONSIBILITY ON THE FINANCIAL PERFORMANCE OF COMPANIES LISTED IN ISE
DOI:
https://doi.org/10.4270/ruc.2020427Keywords:
Corporate governance, Corporate social responsibility, Financial PerformanceAbstract
The study aimed to investigate the effects of corporate social responsibility (environmental and social) on financial performance. To this end, a descriptive and quantitative analysis was carried out, with secondary data, by analyzing data in a logistic panel. We analyzed data from 29 companies listed in the social responsibility index (ISE) from 2012 to 2016. The results of analyzes on the effects of corporate CSR indicate that CSR governance does not directly control financial performance. The results also show that the environmental corporate social responsibility (RSCENV) influences the corporate social responsibility and the financial performance of companies (ROA). No corporate social responsibility (RSCSOC) also influences the relationship. When we measured financial performance by Tobin's Q, the environmental, social, and corporate governance responsibility did not affect performance. We concluded that the corporate social responsibility model, when measured by ROA, affects financial performance, debt, liquidity, and sales growth. Corporate social responsibility alone does not affect performance. We can infer that CSR governance contributes to superior financial performance by achieving good CSR results. The study contributes to the company's strategic decision on its corporate social responsibility and to compare the results with other national studies on the subject.
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