Empirical study on relationship between corporate social responsibility and financial performance in KoreaReport as inadecuate




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Asian Journal of Sustainability and Social Responsibility

pp 1–16

First Online: 12 December 2016Received: 01 April 2016Accepted: 02 November 2016

Abstract

There have been numerous studies on corporate social responsibility CSR and its relation to corporate performance. Recently, studies in this field have paid particular attention to the method of measurement in order to identify the CSR activities. One of the widely recognized measures to proxy CSR is the Environmental, Social, and Governance ESG score. This paper examines the relationship between Corporate Social Responsibility CSR and corporate profit by testing the ESG performance score on the firm’s Financial Performance FP, specifically for Korea Stock Market KOSPI listed firms in the period of 2008 ~ 2014. We use three separate individual Environmental, Social and Corporate Governance ESG disclosure scores from Bloomberg for the CRS proxy measure, as well as the Return on Equity ROE, Market-to-Book Ratio MBR and Stock Return for the FP measures. We found that the ESG disclosure scores the measures of environmental, social, and governance responsibility performance in the Korean corporations shows diversified results. Particularly, the environmental responsibility performance score presents a negative or U curve relationship with FP, whereas the governance responsibility performance score presents a positive or inverse U curve relationship with FP. On the other hand, we did not find any statistically significant evidence of a relationship between the social responsibility performance score and FP.

KeywordsCorporate social responsibility CSR Environmental Social Governance ESG Financial performance FP Sustainability  Download fulltext PDF



Author: Jae-Joon Han - Hyun Jeong Kim - Jeongmin Yu

Source: https://link.springer.com/







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