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Investigating Relationship between Corporate Social Responsibility and Financial Performance using Structural Equation Modelling

Author

Listed:
  • Neena Sinha
  • Timcy Sachdeva
  • Miklesh Prasad Yadav

Abstract

The objective of present study is to investigate the relationship between corporate social responsibility (CSR) and financial performance (FP) with the help of a stakeholder approach in the context of small and medium enterprises (SME) industry in Delhi NCR. A sample of 382 SMEs was analysed through a structured questionnaire having 22 statements out of which two statements were removed due to low factor loading. The goodness of fit was measured by AMOS–SEM and relationship between variables was examined by path analysis. The overall model was fit and finding indicated a weak positive relationship between CSR and FP. The results were in conformance with previous research works by Jain, Vyas and Durga (2016) and Weber (2008). It was also observed that SMEs are socially responsible towards their stakeholders, but it is more in informal nature rather than adopting it as a strategy. Further, the results revealed that CSR of SMEs is associated with religious spirit.

Suggested Citation

  • Neena Sinha & Timcy Sachdeva & Miklesh Prasad Yadav, 2018. "Investigating Relationship between Corporate Social Responsibility and Financial Performance using Structural Equation Modelling," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 43(3), pages 175-191, August.
    • Handle: RePEc:sae:manlab:v:43:y:2018:i:3:p:175-191
    DOI: 10.1177/0258042X18759866
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    References listed on IDEAS

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