Total views : 370

Moderating Effect of Corporate Governance Structure between Corporate Social Responsibility and Performance

Affiliations

  • Department of Business Administration, Cheongju University, 298 Daeseong-ro Cheongwon-gu Cheongju-si Chungcheongbuk-do, 28503, Korea, Republic of

Abstract


Objectives: To empirically analyze the moderating effect of corporate governance structure between CSR and the corporate performance. Methods/Statistical Analysis: To figure out if the corporate governance structure affects the corporate performance through CSR, this paper set the governance structure propriety factor as independent variable, the social responsibility as mediating variable, and the corporate performance as dependent variable. And Moderator regression analysis was conducted to verify the moderating effect of the governance structure between CSR and the corporate performance. Analysis was carried out in four steps regression. Findings: The result of empirical analysis is as follows: First, CSR has a positive effect on the performance; second, the governance structure has a moderating effect between CSR and the performance. In the process to implement CSR activity, agency costs would be incurred from a conflict between shareholders and the board. So considering that the effect CSR has on the performance is subject to the governance structure, sound governance structure may improve the corporate performance. This paper among other studies on CSR has significance in that it analyzed the moderating effect of corporate governance structure between CSR and the corporate performance for the first time. Above all, the inducements to implement CSR activities voluntarily and consistently were found. The significant result of this study is also practically meaningful and able to present a direction for policy making of the government on the corporate social responsibility. Improvements/Applications: The tasks to be done in the future include a relevant study consists of a considerable number of samples and time series data covering long period.

Keywords

CSR (Corporate Social Responsibility), Corporate Governance Structure, Moderating Effect, The Corporate Performance (Return on Assets).

Full Text:

 |  (PDF views: 301)

References


  • Barnea A, Rubin A. Corporate social responsibility as a conflict between shareholders. Journal of Business Ethics. 2010; 97(1):71–86.
  • Hammond SA, Slocum JWJ. The impact of prior firm financial performance on subsequent corporate reputation. Journal of Business Ethics. 1996; 15(2):159–65.
  • Brammer S, Brooks C, Pavelin S. Corporate social performance and stock returns: UK evidence from disaggregate measures. Working Paper; 2005.
  • Park H, Kang D, Kwon I, Shin H. Corporate transparency and its value. Korean Management Review. 2006; 35(5):1361–91.
  • Bowen H. Social responsibilities of the businessman. Haper and Row: New York; 1953.
  • ShinYG. Socially responsible management: business and society. KyungMoonSa; 2001.
  • HeoI G. Corporate social responsibility and competitive advantage of Korean Companies. Doctoral Dissertation. Pusan National University; 2008.
  • Pava M, Krausz J. The association between corporate social responsibility and financial performance: The paradox of social cost. Journal of Business Ethics. 1996; 15:321–57.
  • Hillman, AJ, Keim GD. Shareholder value, stakeholder management, and social issues: What’s the bottom line. Strategic Management Journal. 2001; 22:125–39.
  • Clarkson MBE. A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review. 1995; 20(1):92–117.
  • Waddock SA, Graves SB. The corporate social performance-financial performance link. Strategic Management Journal. 1997; 18(4):303–19.
  • Orlitzky M, Schmidt F, Rynes S. Corporate social and financial performance: A meta-analysis. Organization Studies. 2003; 24:408–441.
  • Hwang BI. The effects of corporate expertise, trustworthiness, social responsibility on corporate reputation and customer's relationship retention intention. The Korean Journal of Advertising. 2004; 15(5):361–78.
  • Griffin JJ, Mahon JF. The corporate social performance and corporate financial performance debate: Twenty-five tears of incomparable research. business and society. 1997; 36:5–31.
  • McWilliams A, Siegel D. Corporate social responsibility and financial performance: Correlation or misspecification? Strategic Management Journal. 2000; 21:603–9.
  • Nelling E, Webb E. Corporate social responsibility and financial performance: The “virtuous circle? Revisited. Review of Quantitative Finance and Accounting. 2009; 32(2):197–209.
  • Johnson JL, Daily CM, Ellstradn AE. Boards of directors: A review and research agenda. Journal of Management. 1996; 22:409–30.
  • Zahra S, Pearce J. Boards of directors and corporate financial performance: A review and integrative model. Journal of Management. 1989; 15:14–159.
  • Barnea A, Rubin A. Corporate social responsibility as a conflict between shareholders. Working Paper; 2006.
  • Aguilera RV, Williams C, Conley JM, Rupp D. Corporate governance and corporate social responsibility. A Comparative Analysis of the U.K. and the U.S. Corporate Governance. An International Review. 2006; 14(3):147–58.
  • Park KS, Lee EJ. The role of foreign investors on the management and corporate governance of Korean companies. Journal of Money and Finance. 2006; 20(2):129–55.
  • Joh SW. Corporate governance and firm profitability: Evidence from Korea before the economic crisis. Working paper. KDI; 2001.
  • Krivogorsky V. Ownership, board structure, and performance in continental Europe. The International Journal of Accounting. 2006; 41:176–97.
  • Yi HJ, Moon SH. The effect of corporate governance on the quality of earnings, operating performance, and firm value. Korean Accounting Association Conference; 2005.
  • Yoon BH, Oh JY. Korean case studies on corporate governance and firm's performance, Value and Market Returns. Asia-Pacific Journal of Financial Studies. 2005; 34(1):227–63.

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.