A Conceptual Framework on Enhancing Corporate Immunity Under The Influence of Corporate Social Responsibility And Financing Strategies
Abstract
Existing research mainly focused on the financial implications of corporate social responsibility (CSR) on firms, overlooking the firm’s intrinsic intention to invest in CSR as to whether the investment is taken to build immunity against shocks or to strategize for future corporate exercises. As such, this paper provides a framework to investigate whether there is any association between CSR investments, firm performance and financing strategies. This paper hypothesized that there is a joint impact of CSR investments and financing strategy as a means to build stronger sustainable corporate immunity. The findings of this framework will assist managers in discerning whether there is a key CSR-ESG orientation that assists firms in future corporate funding exercises and to structure its CSR investments jointly with financing strategy to build stronger immunity.
References
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Baker, E. D., Boulton, T. J., Braga-Alves, M. V., & Morey, M. R. (2021). ESG government risk and international IPO underpricing. Journal of Corporate Finance, 67, 101913.
Benlemlih, M. (2017). Corporate social responsibility and firm financing decisions: A literature review. Journal of Multinational Financial Management, 42, 1-10.
Brooks, C., & Oikonomou, I. (2018). The effects of environmental, social and governance disclosures and performance on firm value: A review of the literature in accounting and finance.The British Accounting Review, 50(1), 1-15.
Christensen, H. B., Hail, L., & Leuz, C. (2021). Mandatory CSR and sustainability reporting: Economic analysis and literature review. Review of accounting studies, 26(3), 1176-1248.
Cahan, S. F., Chen, C., & Chen, L. (2017). Social norms and CSR performance. Journal of Business Ethics, 145, 493-508.
Carroll, A. B. (2021). Corporate social responsibility: Perspectives on the CSR construct’s development and future. Business & Society, 60(6), 1258-1278.
Cheynel, E. (2013). A theory of voluntary disclosure and cost of capital. Review of Accounting Studies, 18, 987-1020.
Clementino, E., & Perkins, R. (2021). How do companies respond to environmental, social and governance (ESG) ratings? Evidence from Italy. Journal of Business Ethics, 171(2), 379-397.
Dahiya, M., Singh, S., & Chaudhry, N. (2023). Unveiling the role of corporate social responsibility on the efficiency of capital investments and their speed of adjustment: Insights from India. Asia Pacific Journal of Management, 1-26.
Demers, E., Hendrikse, J., Joos, P., & Lev, B. (2021). ESG did not immunize stocks during the COVID‐19 crisis, but investments in intangible assets did. Journal of Business Finance and Accounting, 48(3-4), 433-462.
Devalle, A., Fiandrino, S., & Cantino, V. (2017). The linkage between ESG performance and credit ratings: A firm-level perspective analysis. International Journal of Business and Management, 12(9), 53-65.
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Eliwa, Y., Aboud, A., & Saleh, A. (2021). ESG practices and the cost of debt: Evidence from EU countries. Critical Perspectives on Accounting, 79, 102097.
Ferrell, A., Liang, H., & Renneboog, L. (2016). Socially responsible firms. Journal of financial economics, 122(3), 585-606.
Gerard, B. (2019). ESG and socially responsible investment: A critical review. Beta, 33(1), 61-83.
He, F., Du, H., & Yu, B. (2022). Corporate ESG performance and manager misconduct: Evidence from China. International Review of Financial Analysis, 82, 102201.
Heath, D., Macciocchi, D., Michaely, R., & C. Ringgenberg, M. (2023). Does socially responsible investing change firm behavior?. Review of Finance, 27(6), 2057-2083.
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Huang, W., Chen, S., & Nguyen, L. T. (2020). Corporate social responsibility and organizational resilience to COVID-19 crisis: An empirical study of Chinese firms. Sustainability, 12(21), 8970.
Gatti, L., Vishwanath, B., Seele, P., & Cottier, B. (2019). Are we moving beyond voluntary CSR? Exploring theoretical and managerial implications of mandatory CSR resulting from the new Indian companies act. Journal of business ethics, 160, 961-972.
Gomes, M., & Marsat, S. (2018). Does CSR impact premiums in M&A transactions?. Finance Research Letters, 26, 71-80.
Kim, J., Choi, D., Cho, E., Okafor, C. E., & Park, B. I. (2022). Corporate Sustainability in the Wake of the COVID-19 Global Pandemic: Does CSR Enhance Corporate Survival during a Market Crisis?. Sustainability, 14(21), 14438.
Kowalczyk, R., & Kucharska, W. (2020). Corporate social responsibility practices incomes and outcomes: Stakeholders' pressure, culture, employee commitment, corporate reputation, and brand performance. A Polish–German cross‐country study. Corporate Social Responsibility and Environmental Management, 27(2), 595-615.
La Rosa, F., Liberatore, G., Mazzi, F., & Terzani, S. (2018). The impact of corporate social performance on the cost of debt and access to debt financing for listed European non-financial firms. European Management Journal, 36(4), 519-529.
Li, Z., Tang, Y., Wu, J., Zhang, J., & Lv, Q. (2020). The interest costs of green bonds: Credit ratings, corporate social responsibility, and certification. Emerging Markets Finance and Trade, 56(12), 2679-2692.
Lim, J. S., & Greenwood, C. A. (2017). Communicating corporate social responsibility (CSR): Stakeholder responsiveness and engagement strategy to achieve CSR goals. Public relations review, 43(4), 768-776.
Lins, K. V., Servaes, H., & Tamayo, A. (2017). Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis. Journal of Finance, 72(4), 1785-1824.
Macassa, G., McGrath, C., Tomaselli, G., & Buttigieg, S. C. (2021). Corporate social responsibility and internal stakeholders’ health and well-being in Europe: a systematic descriptive review. Health Promotion International, 36(3), 866-883.
Malik, M. (2015). Value-enhancing capabilities of CSR: A brief review of contemporary literature. Journal of business ethics, 127, 419-438.
Pedersen, L. H., Fitzgibbons, S., & Pomorski, L. (2021). Responsible investing: The ESG-efficient frontier. Journal of financial economics, 142(2), 572-597.
Qiu, S. C., Jiang, J., Liu, X., Chen, M. H., & Yuan, X. (2021). Can corporate social responsibility protect firm value during the COVID-19 pandemic?. International Journal of Hospitality Management, 93, 102759.
Revelli, C. (2017). Socially responsible investing (SRI): From mainstream to margin?. Research in International Business and Finance, 39, 711-717.
Revelli, C., & Viviani, J. L. (2015). Financial performance of socially responsible investing (SRI): what have we learned? A meta-analysis. Business Ethics: A European Review, 24(2), 158-185.
Sinha, A., Mishra, S., Sharif, A., & Yarovaya, L. (2021). Does green financing help to improve environmental & social responsibility? Designing SDG framework through advanced quantile modelling. Journal of Environmental Management, 292, 112751.
Yang, S., He, F., Zhu, Q., & Li, S. (2018). How does corporate social responsibility change capital structure?. Asia-Pacific Journal of Accounting & Economics, 25(3-4), 352-387.
Yu, C. H., Wu, X., Zhang, D., Chen, S., & Zhao, J. (2021). Demand for green finance: Resolving financing constraints on green innovation in China. Energy Policy, 153, 112255.
Aouadi, A., & Marsat, S. (2018). Do ESG controversies matter for firm value? Evidence from international data. Journal of Business Ethics, 151, 1027-1047.
Avramov, D., Cheng, S., Lioui, A., & Tarelli, A. (2022). Sustainable investing with ESG rating uncertainty. Journal of Financial Economics, 145(2), 642-664.
Bae, J., Choi, W., & Lim, J. (2020). Corporate social responsibility: An umbrella or a puddle on a rainy day? Evidence surrounding corporate financial misconduct. European Financial Management, 26(1), 77-117.
Bae, K. H., El Ghoul, S., Gong, Z. J., & Guedhami, O. (2021). Does CSR matter in times of crisis? Evidence from the COVID-19 pandemic. Journal of Corporate Finance, 67, 101876.
Baker, E. D., Boulton, T. J., Braga-Alves, M. V., & Morey, M. R. (2021). ESG government risk and international IPO underpricing. Journal of Corporate Finance, 67, 101913.
Benlemlih, M. (2017). Corporate social responsibility and firm financing decisions: A literature review. Journal of Multinational Financial Management, 42, 1-10.
Brooks, C., & Oikonomou, I. (2018). The effects of environmental, social and governance disclosures and performance on firm value: A review of the literature in accounting and finance.The British Accounting Review, 50(1), 1-15.
Christensen, H. B., Hail, L., & Leuz, C. (2021). Mandatory CSR and sustainability reporting: Economic analysis and literature review. Review of accounting studies, 26(3), 1176-1248.
Cahan, S. F., Chen, C., & Chen, L. (2017). Social norms and CSR performance. Journal of Business Ethics, 145, 493-508.
Carroll, A. B. (2021). Corporate social responsibility: Perspectives on the CSR construct’s development and future. Business & Society, 60(6), 1258-1278.
Cheynel, E. (2013). A theory of voluntary disclosure and cost of capital. Review of Accounting Studies, 18, 987-1020.
Clementino, E., & Perkins, R. (2021). How do companies respond to environmental, social and governance (ESG) ratings? Evidence from Italy. Journal of Business Ethics, 171(2), 379-397.
Dahiya, M., Singh, S., & Chaudhry, N. (2023). Unveiling the role of corporate social responsibility on the efficiency of capital investments and their speed of adjustment: Insights from India. Asia Pacific Journal of Management, 1-26.
Demers, E., Hendrikse, J., Joos, P., & Lev, B. (2021). ESG did not immunize stocks during the COVID‐19 crisis, but investments in intangible assets did. Journal of Business Finance and Accounting, 48(3-4), 433-462.
Devalle, A., Fiandrino, S., & Cantino, V. (2017). The linkage between ESG performance and credit ratings: A firm-level perspective analysis. International Journal of Business and Management, 12(9), 53-65.
Dhaliwal, D. S., Radhakrishnan, S., Tsang, A., & Yang, Y. G. (2012). Nonfinancial disclosure and analyst forecast accuracy: International evidence on corporate social responsibility disclosure. The accounting review, 87(3), 723-759. Ding, W., Levine, R., Lin, C., & Xie, W. (2021). Corporate immunity to the COVID-19 pandemic. Journal of financial economics, 141(2), 802-830.
Ding, W., Levine, R., Lin, C., & Xie, W. (2021). Corporate immunity to the COVID-19 pandemic. Journal of financial economics, 141(2), 802-830.
Eliwa, Y., Aboud, A., & Saleh, A. (2021). ESG practices and the cost of debt: Evidence from EU countries. Critical Perspectives on Accounting, 79, 102097.
Ferrell, A., Liang, H., & Renneboog, L. (2016). Socially responsible firms. Journal of financial economics, 122(3), 585-606.
Gerard, B. (2019). ESG and socially responsible investment: A critical review. Beta, 33(1), 61-83.
He, F., Du, H., & Yu, B. (2022). Corporate ESG performance and manager misconduct: Evidence from China. International Review of Financial Analysis, 82, 102201.
Heath, D., Macciocchi, D., Michaely, R., & C. Ringgenberg, M. (2023). Does socially responsible investing change firm behavior?. Review of Finance, 27(6), 2057-2083.
Ho, K. C., Wang, Q., Sun, X., & Wang, L. F. (2022). How does corporate social responsibility affect firm leverage?. Kybernetes, 51(10), 2902-2926.
Hsu, S. C., Wu, K. T., Wang, Q., & Chang, Y. (2023). Is capital structure associated with corporate social responsibility?. International Journal of Corporate Social Responsibility, 8(1), 6.
Huang, H., & Ye, Y. (2021). Rethinking capital structure decision and corporate social responsibility in response to COVID‐19. Accounting & Finance, 61(3), 4757-4788.
Huang, W., Chen, S., & Nguyen, L. T. (2020). Corporate social responsibility and organizational resilience to COVID-19 crisis: An empirical study of Chinese firms. Sustainability, 12(21), 8970.
Gatti, L., Vishwanath, B., Seele, P., & Cottier, B. (2019). Are we moving beyond voluntary CSR? Exploring theoretical and managerial implications of mandatory CSR resulting from the new Indian companies act. Journal of business ethics, 160, 961-972.
Gomes, M., & Marsat, S. (2018). Does CSR impact premiums in M&A transactions?. Finance Research Letters, 26, 71-80.
Kim, J., Choi, D., Cho, E., Okafor, C. E., & Park, B. I. (2022). Corporate Sustainability in the Wake of the COVID-19 Global Pandemic: Does CSR Enhance Corporate Survival during a Market Crisis?. Sustainability, 14(21), 14438.
Kowalczyk, R., & Kucharska, W. (2020). Corporate social responsibility practices incomes and outcomes: Stakeholders' pressure, culture, employee commitment, corporate reputation, and brand performance. A Polish–German cross‐country study. Corporate Social Responsibility and Environmental Management, 27(2), 595-615.
La Rosa, F., Liberatore, G., Mazzi, F., & Terzani, S. (2018). The impact of corporate social performance on the cost of debt and access to debt financing for listed European non-financial firms. European Management Journal, 36(4), 519-529.
Li, Z., Tang, Y., Wu, J., Zhang, J., & Lv, Q. (2020). The interest costs of green bonds: Credit ratings, corporate social responsibility, and certification. Emerging Markets Finance and Trade, 56(12), 2679-2692.
Lim, J. S., & Greenwood, C. A. (2017). Communicating corporate social responsibility (CSR): Stakeholder responsiveness and engagement strategy to achieve CSR goals. Public relations review, 43(4), 768-776.
Lins, K. V., Servaes, H., & Tamayo, A. (2017). Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis. Journal of Finance, 72(4), 1785-1824.
Macassa, G., McGrath, C., Tomaselli, G., & Buttigieg, S. C. (2021). Corporate social responsibility and internal stakeholders’ health and well-being in Europe: a systematic descriptive review. Health Promotion International, 36(3), 866-883.
Malik, M. (2015). Value-enhancing capabilities of CSR: A brief review of contemporary literature. Journal of business ethics, 127, 419-438.
Pedersen, L. H., Fitzgibbons, S., & Pomorski, L. (2021). Responsible investing: The ESG-efficient frontier. Journal of financial economics, 142(2), 572-597.
Qiu, S. C., Jiang, J., Liu, X., Chen, M. H., & Yuan, X. (2021). Can corporate social responsibility protect firm value during the COVID-19 pandemic?. International Journal of Hospitality Management, 93, 102759.
Revelli, C. (2017). Socially responsible investing (SRI): From mainstream to margin?. Research in International Business and Finance, 39, 711-717.
Revelli, C., & Viviani, J. L. (2015). Financial performance of socially responsible investing (SRI): what have we learned? A meta-analysis. Business Ethics: A European Review, 24(2), 158-185.
Sinha, A., Mishra, S., Sharif, A., & Yarovaya, L. (2021). Does green financing help to improve environmental & social responsibility? Designing SDG framework through advanced quantile modelling. Journal of Environmental Management, 292, 112751.
Yang, S., He, F., Zhu, Q., & Li, S. (2018). How does corporate social responsibility change capital structure?. Asia-Pacific Journal of Accounting & Economics, 25(3-4), 352-387.
Yu, C. H., Wu, X., Zhang, D., Chen, S., & Zhao, J. (2021). Demand for green finance: Resolving financing constraints on green innovation in China. Energy Policy, 153, 112255.
Published
2024-06-01
How to Cite
LAI KWAN, Chin.
A Conceptual Framework on Enhancing Corporate Immunity Under The Influence of Corporate Social Responsibility And Financing Strategies.
Asian Journal of Research in Education and Social Sciences, [S.l.], v. 6, n. 2, p. 26-34, june 2024.
Available at: <https://myjms.mohe.gov.my/index.php/ajress/article/view/26849>. Date accessed: 22 jan. 2025.
Section
English Section
