Effects of Corporate Social Responsibility on Corporate Finance Performance: A Competitive-Action Perspective
Abstract
This study investigates the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) through the lens of competitive action (CA). Drawing on a resource-based view and using a sample of 113 U.S. software firms from 2000 to 2005, the authors differentiate between positive corporate social responsibility (PCSR) and negative corporate social (ir)responsibility (NCSR) and examine their distinct effects on firm performance. The findings reveal that PCSR positively impacts CFP, particularly when firms actively engage in competitive actions. Conversely, NCSR has a detrimental effect on CFP when CA levels are high but can enhance financial outcomes when CA is low, suggesting a nuanced interplay between CSR type and firm strategy. This research contributes to the strategic management literature by highlighting CA as a critical contingency in the CSR–CFP relationship and by underscoring the importance of distinguishing between PCSR and NCSR in empirical analyses.
Authors
Dr. Kwang-Ho Kim is a professor specializing in strategic management, competitive dynamics, and corporate social responsibility (CSR). His research focuses on how firms’ competitive behavior and strategic decisions influence performance outcomes, particularly within high-velocity industries. He has published in leading academic journals and is affiliated with Hankuk University of Foreign Studies, where he also engages in research supported by national and institutional grants.
Dr. MinChung Kim conducts research at the intersection of strategic management, innovation, and CSR. Formerly affiliated with the University of Hong Kong, Dr. Kim explores how organizational behaviors, including CSR activities and competitive actions, affect firm performance. Her work contributes to understanding firm strategy in dynamic and competitive environments. She is currently based at UNIST, one of South Korea’s leading research institutions in science and technology.
Dr. Cuili Qian is an academic expert in corporate governance, business ethics, and CSR. Her research examines how firms' strategic actions, including CSR and stakeholder engagement, influence corporate outcomes across different institutional contexts. She has authored numerous articles in top-tier management journals and is a faculty member at the City University of Hong Kong, where she contributes to both research and teaching in global business strategy and ethics.
Keywords
positive CSR, negative CSR, competitive action, financial performance