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Small and Medium Enterprises and the Relation between Social Performance and Financial Performance: Empirical Evidence from Korea

Author

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  • Jun H. Choi

    (Department of Accounting, Dongguk University, Seoul 04620, Korea)

  • Saerona Kim

    (Department of Tax & Accounting, Soongeui Woman’s College, Seoul 04628, Korea)

  • Dong-Hoon Yang

    (Department of Accounting, Dongguk University, Seoul 04620, Korea)

Abstract

Most studies on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) have focused on large enterprises and archival tests for SMEs have been relatively few. There is a need for SME studies that are comparable to the research on large enterprises. In this study, we tested the CSP-CFP relationship of SMEs in Korea using a massive archival database. Although common theories on corporate social responsibility (CSR) in SMEs describe SMEs as non-strategic performers, we found a strong positive relationship between CSP-CFP for the larger or hi-tech SMEs. Therefore, some SMEs are similar to multinational companies in that they approach CSR effectively. This study makes a contribution to the literature on both CSR and SMEs because it empirically demonstrates the heterogeneity of SMEs and it presents a CSR-SME study that is methodologically comparable to the research on big corporations.

Suggested Citation

  • Jun H. Choi & Saerona Kim & Dong-Hoon Yang, 2018. "Small and Medium Enterprises and the Relation between Social Performance and Financial Performance: Empirical Evidence from Korea," Sustainability, MDPI, vol. 10(6), pages 1-18, May.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:6:p:1816-:d:149903
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    References listed on IDEAS

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