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Corporate social responsibility engagement and firm performance in Asia Pacific: The role of enterprise risk management
Author(s) -
Naseem Tahira,
Shahzad Faisal,
Asim Ghazanfar Ali,
Rehman Ijaz Ur,
Nawaz Faisal
Publication year - 2019
Publication title -
corporate social responsibility and environmental management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.519
H-Index - 73
eISSN - 1535-3966
pISSN - 1535-3958
DOI - 10.1002/csr.1815
Subject(s) - corporate social responsibility , endogeneity , business , stakeholder , corporate governance , enterprise risk management , accounting , social responsibility , proxy (statistics) , risk management , public relations , economics , finance , management , machine learning , political science , computer science , econometrics
We examine a channel through which corporate social responsibly affects firm performance. More specifically, we modeled the mediating role of enterprise risk management between corporate social responsibility and firm performance. We use the weighted average of environmental, social, and governance scores (as a proxy of corporate social responsibility) extracted from DataStream of Thomson Reuters‐ASSET4. Drawing on the stakeholder theory and using a large sample of 1021 Asia Pacific firms throughout 2006–2016, we show that corporate social responsibly is positively associated with firm performance. Our results suggest that corporate social responsibly is linked to enterprise risk management. However, the effect of corporate social responsibly on firm performance is both direct and indirect. We provide evidence that enterprise risk management partially mediates the relationship between corporate social responsibility and firm performance. We account for the issue of endogeneity and use alternative measures of firm performance for a robustness check. The findings offer important implications of socially responsible business processes through leveraging on the significance of enterprise risk management.