Corporate social responsibility and corporate financial performance: Evidence from Korea

By Jong-seo Choi, Y. Kwak, Chongwoo Choe. 2010

373 citations recorded by the source corpus.

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.

Subfields: Accounting, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/6434c2795996e108dd6d53ff41a1e2f8f4836e87

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Citations in the corpus

Corporate social responsibility, the cost of equity capital and ownership structure: An analysis of Chinese listed firms (2015, background): “…of customers by providing multimillions of dollars and cloud technology.1 In Australia too, companies such as BHP have been actively investing in various green development programs including ‘green offices’ in countries where their mining activities could have negative effects (Choi et al., 2010).”
A decade's debate on the nexus between corporate social and corporate financial performance: a critical review of empirical studies 2002–2011 (2014, methodology): “…2008; Chang and Kuo, 2008; McPeak and Tooley, 2008; Lee and Park, 2009; Paul and Barbara, 2009; Zhang and Rezaee, 2009; Peters and Mullen, 2009; Choi et al., 2010; Moneva and Ortas, 2010; El Ghoul et al., 2011 66123 0.786 0.210 Positive Not significant Moneva et al., 2007; Becchetti et al.,…”
Exploring the Relationship Between Board Characteristics and CSR: Empirical Evidence from Korea (2015, methodology): “The reliability of the KEJI Index has been reinforced by its 20-year publication record and its extensive use in research and practice (e.g., Chang et al. 2012; Choi et al. 2010; Oh et al. 2011).”
Corporate social responsibility, real activities earnings management, and corporate governance: evidence from Korea (2016, methodology): “The KEJI Index, i.e. the composite CSR score, as assessed by KEJI is widely accepted and employed in prior empirical studies using Korean samples (e.g. Choi, Kwak, and Choe 2010; Oh, Chang, and Martynov 2011; Choi, Lee, and Park 2013).”
Sustainability Matter and Financial Performance of Companies (2017, methodology): “In previous literature, while some papers focus their research on one determined industry, such as [20,68], others explore firms belonging to different industries, such as [54,58,59].”
Social Responsibility and Financial Performance: The Role of Good Corporate Governance (2016, methodology): “The reviews of Choi et al. (2010) show the results to be mostly positive, although some are negative, mixed, or uncorrelated.”
Does ESG Performance Enhance Firm Value? Evidence from Korea (2018, methodology): “Methodology To examine the effect of a firm’s CSR activities on its market valuation, we incorporate Ohlson’s [5] valuation model.”