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The interplay of CSR, stakeholder interest management, capital budgeting, and firm performance

Author

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  • Hunjra, Ahmed Imran
  • Arunachalam, Murugesh
  • Verhoeven, Peter
  • Colombage, Sisira
  • Bouri, Elie

Abstract

This study examines the perspectives of corporate managers regarding corporate social responsibility (CSR), stakeholder interest management, firm performance, and their preferences in capital budgeting. It uses structural equation modelling (SEM) to test hypotheses. The analysis shows that capital budgeting serves as a mediator, diminishing the direct relationship between CSR and firm performance, and between the management of stakeholder interests and firm performance. The findings indicate that instrumental motives guide corporate managers in their capital budgeting decisions. The paper challenges perspectives that disproportionately emphasize the benevolent and moral dimensions of CSR, highlighting the significance of stakeholder interest management as a credible and essential business practice.

Suggested Citation

  • Hunjra, Ahmed Imran & Arunachalam, Murugesh & Verhoeven, Peter & Colombage, Sisira & Bouri, Elie, 2024. "The interplay of CSR, stakeholder interest management, capital budgeting, and firm performance," Journal of Behavioral and Experimental Finance, Elsevier, vol. 43(C).
    • Handle: RePEc:eee:beexfi:v:43:y:2024:i:c:s2214635024000820
    DOI: 10.1016/j.jbef.2024.100967
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    More about this item

    Keywords

    Capital budgeting; CSR; Stakeholder interest management; Firm performance; Instrumental & benevolent motives; Mediating factors;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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