Does corporate governance shape the relationship between corporate social responsibility and financial performance?

Rezaul Kabir, Hahn Thai Minh

    Research output: Contribution to journalArticleAcademicpeer-review

    Abstract

    Purpose: The theoretical and empirical relationships between corporate social responsibility (CSR) and corporate financial performance are not without controversy. Yet, CSR activities are increasingly undertaken by a large number of firms, not only in developed countries but also in emerging countries. This paper aims to investigate the moderating effect of different aspects of corporate governance, which are foreign and state ownership, board size and board independence, on the relationship between CSR and financial performance.

    Design/methodology/approach: A sample of Vietnamese listed firms is analyzed. Robust regression analysis is performed using ordinary least squares as well as fixed-effects and two-stage least squares model.

    Findings: Ordinary least squares regression results show that CSR activities affect the financial performance of firms positively. Furthermore, corporate governance features like foreign ownership, board size and board independence strengthen the positive relationship between CSR and financial performance, but there is no such impact of state ownership.

    Originality/value: Previous studies mostly investigate the direct effect of CSR on financial performance. A few studies examine the moderating effect of corporate governance, which is ownership concentration and board gender diversity. As an emerging country, Vietnam has some specific characteristics on corporate governance. This paper contributes by investigating the moderating effect of few major aspects of corporate governance, which are foreign and state ownership, board size and board independence.
    Original languageEnglish
    Pages (from-to)227-258
    JournalPacific Accounting Review
    Volume29
    Issue number2
    DOIs
    Publication statusPublished - 2017
    Event3rd Vietnam International Conference in Finance, VICIF 2016 - Da Nang, Viet Nam
    Duration: 9 Jun 201610 Jun 2016
    Conference number: 3
    https://vicif.sciencesconf.org/resource/page/id/15

    Keywords

    • Corporate social responsibility
    • Vietnam
    • Firm performance
    • Corporate governance

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