The relationship between corporate social responsibility and sustainable financial performance: firm-level evidence from Taiwan

This study examines the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) in Taiwan. Using CSR awards as a social responsibility indicator, this study finds that socially responsible firms can achieve financial results superior to those of firms which do not pursue CSR initiatives. The relationship remains after endogeneity is treated. The Google Search Volume Index (SVI) is used as a specific proxy for firm visibility, observing that it has a positive influence on the CSR-CFP relationship. On further separation of the sample into electronics and non-electronics industries, the results demonstrate that SVI has a positive influence on the CSR-CFP relationship in the electronics industry. For the non-electronics industries, the results reveal that board ownership has a significant positive influence on the CSR-CFP relationship, and a negative relationship if it is a family business.