Empirical relationship between corporate social responsibility disclosures and financial performance: The impact of firm’s intangible resources

Download This Article

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This paper aims to investigate the Impact of the company’s intangible resources on the relationship between corporate social responsibility (CSR) disclosures and corporate financial performance. A content analysis technique is employed to extract the relevant primary information on CSR disclosure, and the relevant corporate financial information is extracted from the Prowess database of 81 Indian companies representing the ten diverse industries, for the years 2014 to 2016. Further, the panel data regression technique is applied to investigate the proposed relationship. The findings revealed that CSR disclosure has significantly and positively influenced the corporate financial performance determinants of return on equity (ROE) and return on assets (ROA). The intangible resources of human capital and Research & development have significantly and positively impacted the corporate financial performance determinants ROE and ROA, whereas corporate reputation has significantly but negatively impacted the corporate financial performance determinants ROE and ROA. The findings of the study contribute to stakeholder theory by developing a CSR disclosure measurement checklist encompassing the employee, community, customer, and environment dimensions. The study further empirically investigates the proposed relationship in the context of intangible resources.

Keywords: Corporate Social Responsibility, Corporate Financial Performance, Intangible Resources, Human Capital, Corporate Reputation, R&D

Authors’ individual contribution: Conceptualization — V.J.; Methodology — P.K.A.; Software — P.K.A.; Validation — P.K.A. and V.J.; Formal Analysis — P.K.A.; Resources — M.S.; Data Curation — P.K.A. and V.J.; Writing — Original Draft — P.K.A. and M.S.; Writing — Review & Editing — M.S.; Supervision — M.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: I31, M14, N3, P36

Received: 18.04.2023
Accepted: 12.12.2023
Published online: 15.12.2023

How to cite this paper: Aspal, P. K., Singh, M., & Jeet, V. (2023). Empirical relationship between corporate social responsibility disclosures and financial performance: The impact of firm’s intangible resources [Special issue]. Journal of Governance & Regulation, 12(4), 369–378. https://doi.org/10.22495/jgrv12i4siart17