An Empirical Investigation of the Relationship Between Financial Measures and Corporate Social Responsibility

Nowadays, corporate social responsibility (CSR) occupies an important place in doing business worldwide. The public commonly perceives CSR as necessary for businesses to improve the well-being of society. De facto, it is difficult to find a specific definition of CSR. The purpose of this study is to investigate whether CSR has a significant relationship with organizational financial performance in terms of earnings per share (EPS) and the annual rates of return rate (RETURN) on individual stocks in Taiwan. In this study, we use a multi-factor regression model to examine corporate value. The data is taken from the Taiwan Economic Journal (TEJ) database. The empirical results show that: (1) The growth rate of sales (SGR) has a positive impact on RETURN; (2) CSR and leverage (LEV) are significantly correlated with EPS; (3) SGR and return on equity (ROE) have a significant relationship with RETURN; (4) CSR and ROE have a significant correlation with EPS. Consequently, the EPS of the companies that implement CSRs are better than those that do not implement CSRs. However, the results do not indicate that the RETURN of the companies that implement CSRs are better than those that do not implement CSRs.