Title: Corporate social responsibility performance under various economic conditions

Authors: Jiali Jenna Tang; Janie Casello Bouges; Khondkar Karim

Addresses: Department of Accounting, Barney School of Business, University of Hartford, USA ' Department of Accounting, Robert J. Manning School of Business, University of Massachusetts Lowell, USA ' Department of Accounting, Robert J. Manning School of Business, University of Massachusetts Lowell, USA

Abstract: This paper examines how economic conditions impact a firm's corporate social responsibility performance and influence the relationship between financial performance and corporate social responsibility. One theory suggests that in a good economy, firms engage in more corporate social responsibility to reap the marginal benefits of increased consumer purchasing power. Another theory suggests that during a bad economy, firms engage in more corporate social responsibility to chase reduced market share and manage reputation. The expected impact of the economy on corporate social responsibility performance, therefore, depends on which theory dominates. Using data from 2005-2010, we found that firms' corporate social responsibility performance changed significantly during the financial crisis, relative to both the pre- and post-crisis periods. Further, the relationship between financial performance and corporate social responsibility varied based on economic conditions. These results indicate that the motivations for conducting corporate social responsibility hinge on both economic conditions and firms' profitability.

Keywords: corporate social responsibility; CSR; economic conditions; financial performance; financial crisis.

DOI: 10.1504/IJSE.2018.090729

International Journal of Sustainable Economy, 2018 Vol.10 No.2, pp.123 - 152

Received: 15 Sep 2016
Accepted: 24 May 2017

Published online: 13 Dec 2017 *

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