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Analysis of the relationship between corporate social responsibility (CSR) spending and market stock price among Jordanian service firms

Author

Listed:
  • Mohammad Husam Odeh
  • Fadi Mohammed Alshannag
  • Bilal Eneizan
  • Abdelbaset M. Alkhawaldeh
  • Hebah Zaki Makhamreh

Abstract

In this study, the relationship of corporate social responsibility (CSR) spending and Market Stock Price was analyzed. The study sample comprised of 102 services firms listed on the Amman Stock Exchange (ASE) for the years 2010 to 2017. In particular, CSR spending reflects the actual CSR activities monetary contributions that are mandated to be disclosed in the firm’s income statement. This study adopted the Generalized Method of Moment (GMM) to analyze the CSR spending—Market Stock Price relationship. The control variables included firm size, leverage and ownership. Based on the findings, no significant relationship exists between CSR spending and market stock price (MSP) in any direction. Added to this, control variables had no effect on MSP. However, the findings showed a significant positive effect of firm size on CSR spending and a negative effect of leverage on CSR spending, with no significant effect of ownership on the same. This study has several implications for the enhancement of the information and understanding of the firms’ Market Stock Price as it shed light on the CSR spending—Market Stock Price relationship. Moreover, the study findings contribute to literature concerning CSR practices in the context of developing nations.

Suggested Citation

  • Mohammad Husam Odeh & Fadi Mohammed Alshannag & Bilal Eneizan & Abdelbaset M. Alkhawaldeh & Hebah Zaki Makhamreh, 2020. "Analysis of the relationship between corporate social responsibility (CSR) spending and market stock price among Jordanian service firms," Cogent Business & Management, Taylor & Francis Journals, vol. 7(1), pages 1746732-174, January.
    • Handle: RePEc:taf:oabmxx:v:7:y:2020:i:1:p:1746732
    DOI: 10.1080/23311975.2020.1746732
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    Cited by:

    1. Abhinav Karthikeyan Ravichandran & Rashmi Singh, 2024. "Investigating the potential domino effect of a dazzling fiscal-period on CSR performance: a luxury brand scenario," International Journal of Corporate Social Responsibility, Springer, vol. 9(1), pages 1-14, December.

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