How do corporate social responsibility activities affect performance? The role of excess control right

• Published in: Corporate social-responsibility and environmental management 2018-11, Vol.25 (6), p.1320-1331
• Main Authors: Ting, Pi‐Hui, Yin, Hsien‐yu
• Format: Article
• Language: English
• Subjects: Accounting; community; corporate social responsibility; Environmental policy; excess control right; financial performance; Social responsibility
• ISSN: 1535-3958; 1535-3966
• DOI: 10.1002/csr.1641

Using a sample of Corporate Social Responsibility (CSR)‐awarded firms in Taiwan during 2007–2016, this paper examines the impacts of various dimensions of CSR activities on firm financial performance, and investigates how the controlling shareholders' excess control right affects the relationship between CSR and firm financial performance. The empirical results show that the various dimensions of CSR activities affect firm financial performance differently. Moreover, the excess control right negatively affects the relationship between CSR activities and firm financial performance. CSR activities which are related to customers and employees have a significant positive impact on accounting‐based and market‐based performance for high and low excess control right firms. CSR activities which are related with environmental policy harm the accounting‐based financial performance of firms with a high degree of excess control right. Finally, the positive impact of community‐related CSR activities on the accounting‐based financial performance of firms is limited to firms with a low degree of excess control right.