My research objective is to find the impact of CSR on financial performance of the companies. How to measure the CSR as independent variable?
Dear Mr. Vuppuluri!
You spotted a question with great importance. CSR should drive financial performance. I searched for studies and hope you consider of value - added to your work:
1) Aftab, J., Abid, N., Sarwar, H., Amin, A., Abedini, M., & Veneziani, M. (2024). Does corporate social responsibility drive financial performance? Exploring the significance of green innovation, green dynamic capabilities, and perceived environmental volatility. Corporate Socia Responsibility and Environmental Management, 31(3), 1634–1653. https://doi.org/10.1002/csr.2654, Open access: Article Does Corporate Social Responsibility Drive Financial Perform...
2) Paolo Candio, The effect of ESG and CSR attitude on financial performance in Europe: A quantitative re-examination, Journal of Environmental Management, Volume 354,2024,
https://doi.org/10.1016/j.jenvman.2024.120390, Open access: Article The effect of ESG and CSR attitude on financial performance ...
3) Lestari, V. D., Soraya, A., & Hwihanus, H. (2024). Corporate Social Responsibility, Corporate Financial Performance and the Confounding Effects of Economic Fluctuations. Journal of Macroeconomics and Social Development, 1(4), 1–11. https://doi.org/10.47134/jmsd.v1i4.353, Available at: https://economics.pubmedia.id/index.php/jmsd/article/view/353
4) A case study: Asemota O.P., Eddo Z.P., and Etale L.M. (2024) Corporate Social Responsibility Disclosure and Financial Performance of Listed Insurance Firms in Nigeria, European Journal of Accounting, Auditing and
Finance Research, Vol.12, No. 5, pp.,46-6, Fulll access: https://eajournals.org/ejaafr/wp-content/uploads/sites/16/2024/04/Corporate-Social-Responsibility.pdf
A definition of CSR from a financial perspective: "Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public." Investopedia 2024:
https://www.investopedia.com/terms/c/corp-social-responsibility.asp
Yours sincerely, Bulcsu Szekely
To measure corporate social responsibility (CSR) as an independent variable, researchers can use a variety of approaches. Here are some common methods:
1. CSR Ratings and Indices:
- Utilize established CSR ratings or indices provided by organizations like:
- KLD Research & Analytics (now part of MSCI)
- Dow Jones Sustainability Index
- Corporate Responsibility Magazine's 100 Best Corporate Citizens list
- These ratings provide a comprehensive evaluation of a company's CSR performance across multiple dimensions.
2. Content Analysis:
- Analyze the company's public disclosures, such as sustainability reports, corporate social responsibility reports, or annual reports.
- Develop a coding scheme to quantify the extent and quality of CSR-related information disclosed.
- This approach allows for a more nuanced assessment of the company's CSR engagement.
3. Stakeholder Surveys:
- Collect data directly from the company's stakeholders, such as employees, customers, suppliers, or community members.
- Use questionnaires or interviews to assess their perceptions and experiences related to the company's CSR practices.
- This method can provide a more holistic understanding of CSR from the perspective of those impacted by the company's operations.
4. CSR Expenditure or Investment:
- Measure the financial resources the company allocates towards CSR-related activities, such as charitable donations, community investment, or environmental initiatives.
- This approach focuses on the tangible commitment and resources dedicated to CSR by the company.
5. CSR Reporting and Disclosure:
- Evaluate the quantity, quality, and transparency of the company's CSR reporting and disclosure practices.
- This can include analyzing the comprehensiveness, consistency, and adherence to recognized reporting standards (e.g., GRI, SASB, IIRC).
When using these methods, it is important to consider the reliability and validity of the measures, as well as any potential biases or limitations. Researchers may also need to combine multiple approaches to gain a more comprehensive understanding of a company's CSR activities and performance.
There are different ways to measure corporate social responsibility. It could be direct or indirect. Static as a property, dynamic as a performance or overtime as a process. You can also use compliance to certain principles within the environment: such as accountability, transparency and integrity. Qualitative or quantitative data obtained can be measure as dependent or independent variables in the scale of nominal, ordinal, interval or ratio as suggested by Stanley Stavens.
Corporate Social Responsibility (CSR) can be measured using:
These methods provide a comprehensive view of a company's CSR performance.
Corporate Social Responsibility (CSR) is measured by looking at how a company helps people and the planet. People check things like how a company treats its workers, if it helps the community, and if it protects the environment. There are special ways to measure these things, like looking at how much waste a company makes or how many people it helps with its programs.
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