The impact of corporate social responsibility on firm performance: empirical study of Thai public listed companies

Abstract

There exists a large research on whether Corporate Social Responsibility (CSR) has any impact on firm performance, which the empirical researches produced mixed results. Since the CSR practices are maturing, constantly proceeding, developing, and gradually evolving, therefore it is necessary to discuss the current updated information. To broaden the result, this particular study used Thai Public Listed Companies (PLCs) in the Stock Exchange of Thailand (SET) as a main sample, and takes an opportunity of applying both quantitative and qualitative research approaches to produce a specific dataset in order to weigh the imperfection of each and to grasp the full extent of practicable results. A quantitative method was used to gather sufficient data from structured questionnaire survey and existing database, PLCs’ financial annual report for the year 2010-2013. To answer the research questions, five hypotheses were formulated based on relevant theories and previous studies, and analyzed the data by Structural Equation Modeling (SEM) technique. A qualitative research method employed semi-structured interviews with high-level managers from various industries in order to get closer to the subjects’ perspective, particularly in emerging research areas. In aggregate, the results conclude that CSR has no positive impact on firm performance. However, firms cannot produce long-term profit if they have poor relations with their stakeholders, in contrary, firms cannot serve all their needs and remain profitable. From business viewpoint, firms’ financially performance should be healthy and they should have adequate resources in engaging CSR, or else firms would confront financial distress and economic inefficiency. Therefore, questions and unanswered problems remain concerning the firms’ CSR involvement: should a firm participate in CSR activities that have not been appreciated by shareholders and that do not generate shareholder wealth maximization? Moreover, do firms with high profits contribute their shares to society, or is it that CSR or society itself produces higher returns for firms?