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Literature Review: Corporate Social Responsibility (CSR) Practice

1011 Words5 Pages

2.1 Literature Review

Corporate Social Responsibility (CSR) practice has gradually becoming a hot topic in corporate world and empirical studies of CSP and Corporate Financial Performance (CFP) started over decades ago and the conclusion have been mixed. Numerous studies have been carried out on the relationship between CSR and CFP resulting in three different potential results: negative link, no link, and positive link. According to Rajput, Batra, & Pathak (2012) the past studies on CSR resulting in three different groups which the first group supports CSR and claims that it give positive results to the company’s profitability, second group is neutral and claims that CSR give no impact to the company’s profitability and third group claims …show more content…

The study used a regression model and the data was taken from a sample of 63 listed Chinese food-processing companies. They found that CSR index; corporate social responsibility to the creditor, staff, government, suppliers and consumers have a positive impact on the company 's financial performance which are rate of return on common stockholders ' equity (ROE) and Asset profit Ratio(ROA). Ju-qin & Yu-jin (2015) argue that even though fulfilling CSR may increase current operating cost, as time goes by, it will give positive impact on the company’s financial …show more content…

Data were collected from the annual report from firms listed in Bursa Malaysia for the period of 5 years (2007 to 2011). CSR represent by environment, community, marketplace and workplace were used as independent variable while CFP represent by Return on Asset (ROA) and Return on Equity (ROE) were used as dependent variable. The result shows that CFP has positive relationship with CSR practices along with control variable which are size of firm and revenue of firm. However, the short timeframe (2002 to 2011) and small number of the firm used may not enough to justify the

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