Munich Personal RePEc Archive

Corporate Social Responsibility and Corporate Financial Performance: Evidence from Korea

Choi, Jong-Seo and Kwak, Young-Min and Choe, Chongwoo (2010): Corporate Social Responsibility and Corporate Financial Performance: Evidence from Korea.

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Abstract

This paper studies the empirical relation between corporate social responsibility (CSR) and corporate financial performance in Korea using a sample of 1122 firm-years during 2002-2008. We measure corporate social responsibility by both an equal-weighted CSR index and a stakeholder-weighted CSR index suggested by Akpinar et al. (2008). Corporate financial performance is measured by ROE, ROA and Tobin’s Q. We find a positive and significant relation between corporate financial performance and the stakeholder-weighted CSR index, but not the equal-weighted CSR index. This finding is robust to alternative model specifications and several additional tests, providing evidence in support of instrumental stakeholder theory.

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