IDEAS home Printed from https://ideas.repec.org/a/taf/oabmxx/v8y2021i1p1938349.html
   My bibliography  Save this article

Corporate social responsibility and firm performance: The moderation of investment horizon and corporate governance

Author

Listed:
  • Abdul Waheed
  • Shahzad Hussain
  • Hasan Hanif
  • Hamid Mahmood
  • Qaisar Ali Malik

Abstract

The current study proposes an integrated theoretical frame work, to explain the moderating role of institutional investors, their investment horizon and corporate governance mechanism in the sustainability of corporate social responsibility (CSR) and firm’s performance nexus. The proposed model explains how, the positive association between CSR and firm performance relationship, established on the basis of the stakeholder and corporate citizenship theories, can be further strengthened (effective monitoring hypothesis) or weakened (myopic institutions theory) by the presence of institutional investors in the firm’s ownership structure and corporate governance mechanism (agency theory). The study tested the proposed model on the unbalanced sample of 327 non-financial firms listed on the Pakistan stock exchange (PSX). The study concludes that, based on the agency theory, institutional investors (as a homogeneous group) positively moderates the CSR and firm performance relationship. However, agency theory failed to explain the negative moderation of short term investment horizon institutional investors and firm performance. The study further confirms the agency role of effective corporate governance mechanism in the sustainable CSR and firm performance relationship. The current study explored some of the major theoretical contradictions in the field of corporate finance literature, which are puzzling for the practitioners and scholars.

Suggested Citation

  • Abdul Waheed & Shahzad Hussain & Hasan Hanif & Hamid Mahmood & Qaisar Ali Malik, 2021. "Corporate social responsibility and firm performance: The moderation of investment horizon and corporate governance," Cogent Business & Management, Taylor & Francis Journals, vol. 8(1), pages 1938349-193, January.
    • Handle: RePEc:taf:oabmxx:v:8:y:2021:i:1:p:1938349
    DOI: 10.1080/23311975.2021.1938349
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/23311975.2021.1938349
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/23311975.2021.1938349?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Patrick Velte, 2023. "Which institutional investors drive corporate sustainability? A systematic literature review," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 42-71, January.
    2. V. Veeravel & E. K. S. Sadharma & Bandi Kamaiah, 2024. "Do ESG disclosures lead to superior firm performance? A method of moments panel quantile regression approach," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 741-754, January.
    3. Collins Kankam-Kwarteng & George Nana Agyekum Donkor & Francis Osei & Ofosu Amofah, 2024. "Do corporate social responsibility and corporate image influence performance of the financial sector?," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(2), pages 306-317, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:oabmxx:v:8:y:2021:i:1:p:1938349. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://cogentoa.tandfonline.com/OABM20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.