Title: Corporate social responsibility, employee productivity and firm valuation

Authors: Shieh-Liang Chen; Cheng-Kun Liu; Chia-Ying Liu

Addresses: Department of Business Administration, Asia University, Taiwan ' FECO ENETECH Co., Ltd., Taichung, Taiwan ' Department of Business Administration, Asia University, Taiwan

Abstract: This paper first examines whether the more investments in corporate social responsibility (CSR), the less likely the share prices will be undervalued by the market. Secondly, we analyse whether there is a positive correlation between the spending on CSR and the company's productivity and explore the impact of CSR on future financial performance of a firm. The findings show that if the spending on CSR is high in the prior or/and current periods, current share prices are less likely to be undervalued. A stronger focus on CSR in the prior or/and current periods does not lead to higher productivity. This is possible because the input of CSR has no influence on the incentives to employees. In addition, the more efforts in CSR in the prior or current periods, the better is the future financial performance. This study, hence, concludes that CSR input can mitigate undervaluation and improve future operation performance.

Keywords: corporate social responsibility; CSR; undervaluation; employee productivity; financial performance.

DOI: 10.1504/IJBEX.2019.102235

International Journal of Business Excellence, 2019 Vol.19 No.2, pp.285 - 303

Received: 31 Oct 2017
Accepted: 06 Jul 2018
Published online: 12 Sep 2019 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article