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Corporate social responsibility and corporate performance: a quantile regression approach

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Abstract

This paper investigates the impact of corporate social responsibility activities on corporate performance. In view of the inconsistent empirical findings in the literature, and the limitations of least squares regressions, we adopt a quantile regression method to fill this gap in the literature. An important finding is that the sensitivity of a company’s performance to its engagement in corporate social responsibility activities does not vary with the quantile location of the firm’s performance level, and the engagement in corporate social responsibility activities has a significant positive relation with corporate performance across all quantiles. This study argues that undertaking corporate social responsibility leads to greater financial returns than the related costs. Therefore, this study concludes that engaging in corporate social responsibility is beneficial for firms, and thus worth implementing.

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Notes

  1. Confucian thought focuses on the cultivation of virtue and maintenance of ethics. The core of Confucian ethics consists of three elements—ren, yi, andli that define what is morally acceptable in human society.Ren is an obligation of altruism and benevolence for other individuals. Confucius would expect a benevolent person to show the quality of humanity in interpersonal relationships in general, whether commercial or non-commercial (Lam 2003). Yi is a belief in righteousness and the moral disposition to do good, and hence requires one to discern what is right and good, and to do what is moral, as opposed to being driven by desire for material gain and self-interest. Li is a system of norms and propriety that determines how individuals act in a given relationship.

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Authors and Affiliations

  1. Department of Business Administration and Institute of International Business, National Cheng Kung University, No.1, University Road, Tainan , 701, Taiwan, ROC

    Hsin-Hong Kang & Shu-Bing Liu

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  1. Hsin-Hong Kang
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  2. Shu-Bing Liu
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Correspondence to Shu-Bing Liu.

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Kang, HH., Liu, SB. Corporate social responsibility and corporate performance: a quantile regression approach. Qual Quant 48, 3311–3325 (2014). https://doi.org/10.1007/s11135-013-9958-6

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