The impact of corporate social responsibility as a marketing investment on firms’ performance: a risk-oriented approach

Mohamed M. Ibrahim*, Mohamed M. El Frargy, Khaled Hussainey

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

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    Abstract

    In light of the growing interest in corporate social responsibility (CSR), there is still controversy regarding its impact on firms’ performance. In this paper, we examine the impact of CSR initiatives, as a marketing investment, on firms’ performance. We treat CSR initiatives as investment and, consequently, the returns appear over the long term. We use the stochastic frontier analysis (SFA) approach which is a forward-looking financial market-based metric that captures the firm’s long-term performance. We focus on the banking industry as it confronts a variety compound of risk. We find that CSR implementation is positively reflected in profit efficiency, regardless of the strategic commitment to implementing CSR and bank size, as these variables do not influence the CSR–performance relationship. However, we find that bank age and competitive positioning have a significant impact on the CSR–performance relationship. Our study provides valuable insights to CSR practitioners and researchers, especially in the banking sector. We provide empirical evidence on the importance of CSR and its positive impact on bank performance in Egypt as one of the emerging markets.
    Original languageEnglish
    Article number515
    Number of pages18
    JournalJournal of Risk and Financial Management
    Volume14
    Issue number11
    DOIs
    Publication statusPublished - 27 Oct 2021

    Keywords

    • corporate social responsibility
    • profit efficiency
    • stochastic frontier analysis
    • banking sector
    • Egypt

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