IDEAS home Printed from https://ideas.repec.org/a/taf/oaefxx/v12y2024i1p2344228.html
   My bibliography  Save this article

Do corporate social responsibility activities enhance firm value? An empirical evidence from Taiwan

Author

Listed:
  • Hung-Yu Chen
  • Ming-Chin Lin
  • Zong-Han Lin

Abstract

In the past few decades, companies have begun to pay attention to the issue of whether companies that are engaged in CSR activities enhance firm value remains a subject of debate. From the perspective of agency theory, high-CSR companies can encounter poor financial performance and a reduction in firm value because of managers’ bad project selection. According to stakeholder theory, high-CSR companies face a positive relationship to financial performance and vament as a result of consideration for the benefits of stakeholders. This study collects CSR data from CommonWealth Magazine and examines how Taiwanese companies engaged in CSR activities affect corporate financial performance. The empirical finding shows that CSR is significantly positive to corporate financial performance. This result suggests that companies actively engaged in CSR activities bring a positive effect on firm value. Therefore, our evidence supports the stakeholder theory that high CSR companies benefit their stakeholders.Recently, there has been a change in the way businesses operate, with enterprises beginning to prioritize issues such as environmental protection, social responsibility, and corporate governance. They coexist and prosper alongside these concerns. Corporate social responsibility is a broad concept of sustainable development, while ESG embodies the principles of how CSR is implemented. This study examines the impact of CSR activities on corporate financial performance among Taiwanese companies. The empirical findings show a significantly positive correlation between CSR and corporate financial performance, suggesting that companies actively engaged in CSR activities bring positive effects to firm value. The evidence supports the stakeholder theory, indicating that high CSR companies benefit their stakeholders. The empirical implications suggest that advocating for CSR could strengthen favorable relationships with stakeholders, thereby benefiting companies. In practice, companies dedicated to engaging in CSR activities can enhance performance and increase value. The research results imply that promoting CSR activities is an investment rather than a cost, urging companies to increase their involvement in CSR activities without hesitation. From an investor’s standpoint, endorsing companies’ efforts in CSR is essential, not only for shareholders’ profitability but also for overall sustainability. Policymakers should formulate comprehensive policies, providing incentives such as tax relief or support schemes to encourage companies to invest in CSR activities.

Suggested Citation

  • Hung-Yu Chen & Ming-Chin Lin & Zong-Han Lin, 2024. "Do corporate social responsibility activities enhance firm value? An empirical evidence from Taiwan," Cogent Economics & Finance, Taylor & Francis Journals, vol. 12(1), pages 2344228-234, December.
  • Handle: RePEc:taf:oaefxx:v:12:y:2024:i:1:p:2344228
    DOI: 10.1080/23322039.2024.2344228
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/23322039.2024.2344228
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/23322039.2024.2344228?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.

    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:oaefxx:v:12:y:2024:i:1:p:2344228. 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://www.tandfonline.com/OAEF20 .

    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.