Impact of corporate social responsibility on financial performance : a study on manufacturing companies listed in London stock exchange (LSE)-UK
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2017
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Abstract
The purpose of this study is to examine impact of Corporate Social Responsibility (CSR) on financial performance. The research is carried out on 36 manufacturing and production companies listed in the London Stock Exchange (LSE) within the period of 2011-2015, with the total observations of 180. The subsectors considered are Aerospace and Automotive, Mining, Industrial Goods, Food, Beverage and Tobacco, Domestic Goods, Industrial Machinery and Equipment, Healthcare and Paper Products. The independent variable used in this research is Corporate Social Responsibility (CSR) broken into 4 constituent: Corporate giving, Employee safety, Greenhouse gas emission reduction and waste reduction. The dependent variables used are Return on Assets (ROA) and Return on Equity (ROE). Sampling technique used in this research is convenience sampling. The research paradigm adopted a positivist approach and quantitative data was used. This study adopts an explanatory research design, and secondary data is collected and analyzed using E-views software to generate the descriptive, and regression statistics. Furthermore, the findings in this study show that Corporate giving, Employee safety and waste reduction have no significant impact on financial performance. However, Greenhouse gas emission reduction has significant but negative impact on financial performance.
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Financial Management