An empirical investigation of the relationship between financial measures and corporate social responsibility

  • Yu-Min Lian 1 Department of Business Administration, Fu Jen Catholic University, No. 510, Zhongzheng Rd., Xinzhuang Dist., New Taipei City 24205, Taiwan
  • Yi-Ching Chen 2 Department of Accounting, Fu Jen Catholic University, No. 510, Zhongzheng Rd., Xinzhuang Dist., New Taipei City 24205, Taiwan
  • Bing-Kai Kao 2 Department of Accounting, Fu Jen Catholic University, No. 510, Zhongzheng Rd., Xinzhuang Dist., New Taipei City 24205, Taiwan
  • Yung-Hsin Yeh 1 Department of Business Administration, Fu Jen Catholic University, No. 510, Zhongzheng Rd., Xinzhuang Dist., New Taipei City 24205, Taiwan
DOI: https://doi.org/10.18282/ff.v7i1.683
Keywords: Financial measure, Corporate social responsibility, Multi-factor regression model, Corporate value

Abstract

Nowadays, in actual business world, corporate social responsibility (CSR) occupies an important place in doing business all over the world. The public commonly takes CSR as the necessary for businesses to make extra improvements to the well-being of society. De facto, it is difficult to find a specific definition of CSR. The purpose of this study is to carry out research on whether CSR has a significant relationship with organizational financial performance in terms of earnings per share (EPS) and annual return rate of individual stocks (RETURN), with a major target on quoted companies in Taiwan. In this study, we establish a multi-factor regression model to examine corporate value. The Taiwan Economic Journal (TEJ) database is used to explore the relevance. Empirical results show that: (1) Sales growth rate (SGR) has a positive impact on RETURN; (2) CSR and leverage (LEV) have a significantly correlation with EPS; (3) SGR and return on equity (ROE) have a significant relationship with RETURN; (4) CSR and ROE have a significantly correlation with EPS. Consequently, the EPS of the companies that implement CSRs are better than those that do not implement CSRs. However, the results do not indicate that the RETURN of the companies that implement CSRs are better than those that do not implement CSRs.

Author Biography

Yu-Min Lian, 1 Department of Business Administration, Fu Jen Catholic University, No. 510, Zhongzheng Rd., Xinzhuang Dist., New Taipei City 24205, Taiwan
Business Administration,assistant professor

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Published
2019-03-29
Issue
Vol 7, No 1 (Published)
Section
Articles

Copyright (c) 2018 Yu-Min Lian

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