Corporate Social Responsibility and Financial Performance: an Empirical Analysis of Malaysian Listed Firms
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School of Business |
Bachelor's thesis
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Authors
Date
2017
Department
Major/Subject
Mcode
Degree programme
(Mikkeli) Bachelor’s Program in International Business
Language
en
Pages
39
Series
Abstract
Objectives The main purpose of this paper is to examine the relationship between Corporate Social Responsibility (CSR) and Corporate Financial Performance (CFP) in the context of Malaysian listed firms between year 2014 and 2016. Summary This paper analysed the ROE and Tobin’s Q between CSR and Non-CSR firm in the Kuala Lumpur Composite Index (KLCI) between 2014 and 2016 to test for the presence of a bidirectional relationship between CSR and CFP as per literature. The KLCI firms were segregated into CSR and Non-CSR by consulting the FTSE4Good Bursa Malaysia Index (FBMI). Among the methods used to test this relationship were Student’s t-test, multivariate and logistic regression. Bootstrap confidence intervals of the regression coefficients were further used to determine the strength of the relationship. Conclusions This study found that there is a positive and significant relationship between CSR and CFP in that CSR one year lagged is followed by improved CFP in the financial year. CFP one year prior, however, does not seem to lead to decisions to engage in CSR. Therefore, this study proposes that Malaysian listed firms should engage in CSR as it forms a viable part of the strategy of a firm.Description
Thesis advisor
Rannikko, HeikkiKeywords
corporate social responsibility, financial performance, Malaysian listed firms, Malaysia