The Impact of Selected Moderators on the Relationship Between CSR and Profitability : Evidence from China

Abstract

With the rapid development of the economy, corporate behaviour has an increasing impact on the economy, society and the natural environment. Therefore, corporate social responsibility (CSR) has become a hot topic in the business community, the public and researchers. In the existing literature, research on the relationship between CSR and corporate financial performance (CFP) has been one of the focuses for decades. However, the results are inconclusive. Therefore, some scholars suggest that research could be carried out under the consideration of some moderators or mediators. Many studies have focused on how CSR affects CFP when certain moderating or mediating variables are taken into account. Little attention has been paid to the opposite effect, namely, how CFP affects CSR under certain mediators or mediators, especially in emerging economies. Therefore, the aim of this monograph is to study and verify whether the profitability of different types of companies, companies at ifferent life cycle stages, and companies with different levels of internal control have a comparable impact on CSR engagement. The research sample is selected from Chinese home appliance listed companies from 2018 to 2020. The monograph is divided into seven chapters. Chapter 1 firstly describes the current research results on the relationship between CSR and CFP in detail, and points out the existing gap, which becomes the theme of this research. Second, the current CSR situation of listed companies in China is introduced. Finally, the structure and content of the monograph are briefly described. Chapter 2 focuses on analysing how profitability affects CSR engagement, and how this effect changes across different company types, corporate life cycle stages, and levels of internal control. Hypotheses are formulated based on theoretical analysis and empirical findings. Chapter 3 delineates the two methods used in the monograph: the Analytic Hierarchy Process (AHP), applied to determine the CSR engagement for Chinese home appliance listed companies’ conditions and the interactive regression model to analyse the impact of the selected moderators on the relationship between profitability and CSR engagement. Chapter 4 is the presentation of the model and sample data, consisting of the measurement or identification of the main variables used in regression models, the specification of regression models for testing hypotheses, and sample data sources. Subsequently, the validation of the models and empirical results are presented in Chapter 5. The results are then explained and discussed in Chapter 6. The final chapter, ChapterVI Preface 7, is the conclusion, including a summary of the findings, the contributions of the monograph, and further research directions. This monograph is suitable for readers interested in the CSR situation in China. Many current impressions of CSR are based on research in developed economies such as the United States and European countries. In emerging economies, the situation may be different. Our research found that the overall impact of CFP on CSR engagement in the Chinese home appliance industry is neutral. Founder companies are reluctant to engage in CSR projects like family companies actively. Compared with companies in other stages of the corporate life cycle, mature companies are less involved in CSR. Moreover, their average CSR engagement level is the lowest across the corporate life cycle. However, CFP has a positive impact on the CSR engagement of mature companies and a negative impact on companies at other stages of the corporate life cycle. Of course, some findings are the same as the existing results, such as the company’s level of internal control, which could improve CSR engagement and enhance the impact of CFP on CSR. This research was supported by the VSB — Technical University of Ostrava Student Grant Competition project No. SP2023/008. This support is gratefully acknowledged. In addition, I would like to express my sincere gratitude to my supervisor for his patient guidance, encouragement and support throughout the writing process. Last but not least, I thank my family for their understanding, tolerance and support.