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Managing Financial Risks of Global Companies Through Corporate Social Responsibility: The Specifics of Sustainable Employment in Developed and Developing Countries

Author

Listed:
  • Bobir O. Tursunov

    (Department of Management, Tashkent State University of Economics, I. Karimov Str., Tashkent 49100003, Uzbekistan)

  • Chinara R. Kulueva

    (Department of Finance and Banking, Osh State University, Osh 723500, Kyrgyzstan)

  • Olim K. Abdurakhmanov

    (Department of Taxes and Taxation, Tashkent State University of Economics, I. Karimov Str., Tashkent 49100003, Uzbekistan)

  • Larisa V. Shabaltina

    (Department of Management Theory and Business Technologies, Plekhanov Russian University of Economics, 36 Stremyanny Lane, 115054 Moscow, Russia)

  • Tatyana I. Bezdenezhnykh

    (Department of Management and Planning of Socio-Economic Processes, St. Petersburg State University, 199034 St. Petersburg, Russia)

Abstract

The motivation for this research was the desire to disclose the social nature of the financial risks of global companies: the authors attempted a scientific explanation of the influence of corporate social responsibility, which is manifested through the preservation and creation of additional jobs, on the financial risks of global companies. The research aims to establish the interdependence between financial risks and sustainable employment in global companies. This goal is achieved using the SEM (structural equation modeling) method based on corporate statistics from the Fortune “Global 500” rankings for 2021–2023. As a result, the consequences of global companies’ CSR (corporate social responsibility) practices in personnel management and financial risk management are modeled and described through quantitative and qualitative patterns. The established regularities proved that for developed and developing countries, the larger the number of employees, the lower the financial risks of global companies—the risk of a decrease in profitability, the risk of loss of profit, and the risk of depreciation of assets. The main conclusion is that there is a close systemic relationship between the financial risks of global companies and their workforce size, suggesting that CSR is key to highly effective financial risk management. A clear distinction between the practices of financial risk management through CSR in developed and developing countries forms the basis of the theoretical significance of the research results. The authors provide recommendations to improve the current practice of financial risk management in global companies by integrating it more closely with personnel management practices, highlighting their managerial relevance. It is proposed that corporate strategies for global companies in developed countries should focus on reducing the risk of declining profitability, as CSR has the most pronounced and consistent impact on this particular financial risk. In developing countries, corporate strategies are recommended to be structured by diversifying the areas of CSR application, with the most promising in financial risk management being the reduction in asset depreciation risk and the reduction in profitability risk. The findings of this research have practical significance because they enhance the predictability of CSR activities of global companies and open up opportunities for highly accurate forecasting of the financial risk implications of ensuring sustainable employment by global companies, considering the specificities of developed and developing countries.

Suggested Citation

  • Bobir O. Tursunov & Chinara R. Kulueva & Olim K. Abdurakhmanov & Larisa V. Shabaltina & Tatyana I. Bezdenezhnykh, 2024. "Managing Financial Risks of Global Companies Through Corporate Social Responsibility: The Specifics of Sustainable Employment in Developed and Developing Countries," Risks, MDPI, vol. 12(10), pages 1-68, October.
  • Handle: RePEc:gam:jrisks:v:12:y:2024:i:10:p:168-:d:1502857
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    References listed on IDEAS

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    1. Asma Raies, 2023. "Sustainable Employment in Developing and Emerging Countries: Testing Augmented Okun’s Law in Light of Institutional Quality," Sustainability, MDPI, vol. 15(4), pages 1-13, February.
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