The virtuous circle of corporate social responsibility and corporate financial performance: the mediating role of firm reputation / Vani Tanggamani, Azlan Amran and T. Ramayah

Tanggamani, Vani and Amran, Azlan and Ramayah, T. (2019) The virtuous circle of corporate social responsibility and corporate financial performance: the mediating role of firm reputation / Vani Tanggamani, Azlan Amran and T. Ramayah. In: ICAM2019 – International Conference on Accounting and Management. Faculty of Accountancy, Universiti Teknologi MARA Puncak Alam, Selangor, p. 57. ISBN 978-967-17038-0-9

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Abstract

Profitability is undeniably the main goal of business organizations. This study focuses on the effect of previous-year CSR practices to current-year financial performance, and then its effect on future-year CSR practices. This study also investigates the mediating effect of current-year firm reputation on the relationship between previous-year CSR practices and current-year financial performance, and on the relationship between current-year financial performance and future-year CRR practices. Using a stratified random sampling, 200 public listed firms on Bursa Malaysia were selected as sample of this study. Content analysis of their annual reports from year 2013 to 2015 and company website was carried out to determine their CSR practices disclosure, ROA and firm reputation. Partial least squares – structural equation modelling was used to analyse the samples. Findings showed that previous-year CSR practices lead to significant and positive effect on current-year reputation and corporate financial performance. Current-year reputation mediates the relationship between previous-year CSR and current-year corporate financial performance. However, current-year corporate financial performance does not lead to future-year CSR practices disclosure. This study showed that CSR practices have immediate positive effect on corporate financial performance but the profitability did not lead to more disclosure in subsequent-year CSR practices. Hence, further study might explore a wider time gap between current-year corporate financial performance and future CSR practices. Conclusively, CSR practices are critical success factor that must be effectively and efficiently implemented by firms

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Item Type: Book Section
Creators:
Creators
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Tanggamani, Vani
vani@melaka.uitm.edu.my
Amran, Azlan
UNSPECIFIED
Ramayah, T.
UNSPECIFIED
Subjects: H Social Sciences > HD Industries. Land use. Labor > Management. Industrial Management > Social responsibility of business. Social entrepreneurship
H Social Sciences > HG Finance > Balance sheets. Financial statements. Including corporation reports. Financial reporting. Financial disclosure
Divisions: Universiti Teknologi MARA, Selangor > Puncak Alam Campus > Faculty of Accountancy
Page Range: p. 57
Item ID: 43780
Uncontrolled Keywords: Corporate social responsibility; Corporate financial performance; ROA; Firm reputation; PLS-SEM
URI: https://ir.uitm.edu.my/id/eprint/43780

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43780

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