The effect of social responsibility and risk-taking on the performance of companies according to the moderator variable of financial constraint

Document Type : Original Article

Authors
nasrin dadashi 1
Mohammad Reza Pourali 2
1 PhD Student in Accounting, Department of Accounting, Rasht Branch, Islamic Azad University, Rasht, Iran
2 Associate Professor of Accounting, Department of Accounting, Chalous Branch, Islamic Azad University, Chalous, Iran
Abstract
The willingness and insistence of the business unit to commit to social responsibility in all dimensions have a significant effect on financial performance. Therefore, the implementation of corporate social responsibility, leads to improving the success of companies in the long run and ultimately leads to economic growth and increase the competitiveness of the company and improve its financial performance. Risk is an integral element of the decision-making process in the organization. The decisions of managers and investors are in line with the increase in returns and wealth through risk reduction. Also, the company's financial constraint prevent the provision of funds for the desired investment, and most researches has measured the issue of social responsibility and risk with profit, and ignores the relationship between financial constraint and liquidity with performance. Therefore, the purpose of this study is the effect of corporate social responsibility and risk-taking on performance with respect to the moderator variable of financial constraint. The research data were tested based on a sample of 455 years-participating from the Tehran stock exchange during the years 2014-2018, it has been used to test the research hypotheses, multivariate linear regression with combined data. Findings of study show that social responsibility and risk-taking have a significant and inverse effect on company performance. Also, the moderator variable of financial constraint has a positive and significant effect on the relationship between social responsibility and performance, but does not have a significant effect on the relationship between risk-taking and performance.
Keywords
social responsibility
risk taking
financial constraint
performance
  • اثنی عشری و ولی‌زاده لاریجانی (1397). رفتار ریسک‌پذیر طی چرخۀ عمر شرکت و اثر آن بر عملکرد مالی آتی به روش گشتاورهای تعمیم‌یافته (GMM). پژوهش‌های حسابداری مالی. سال 10. شماره اول. صص 1-18.
  • احمدپور، احمد، شهسواری، معصومه، عموازده خلیلی (1395). بررسی عوامل مؤثر بر ریسک ورشکستگی مالی شرکت ها. مطالعات تجربی حسابداری مالی. 13 (51). صص 34-9.
  • اشرفی، جواد؛ رهنمای رودپشتی، فریدون؛ بنی مهد، بهمن (1398). نظریه‌های مسئولیت‌پذیری اجتماعی شرکت ها، فصلنامه علمی پژوهشی دانش حسابداری و جسابرسی مدیریت. 8 (31). صص 14-1.
  • پناهی، اسماعیل؛ نوروزی، محمد؛ قاسمی، مهرناز؛  قاسمی، عادل (1394).  بررسی اثر افشای مسئولیت اجتماعی و نرخ بازده دارایی در شرکت های پذیرفته شده در بورس اوراق بهادار تهران. کنفرانس بین‌المللی اقتصاد مدیریت و علوم اجتماعی. 12 صفحه.
  • پورعلی، محمدرضا؛ حجامی، محدثه (1393). بررسی رابطه بین افشای مسئولیت اجتماعی و مالکیت نهادی در شرکت های پذیرفته شده در بورس اوراق بهادار تهران. فصلنامه علمی پژوهشی دانش حسابداری و جسابرسی مدیریت. 3 (10). صص 150-135
  • حاجی ابراهیمی و اسکندر(1398). بررسی تاثیر بیش اطمینانی مدیریت بر ریسک‌پذیری و عملکرد شرکت. پژوهش‌های تجربی حسابداری. سال 8. شماره 31. صص 339-362.
  • عرب صالحی، مهدی؛ صادقی، غزل؛ معین الدین، محمود (1392). رابطه مسئولیت اجتماعی با عملکرد مالی شرکت های پذیرفته شده در اوراق بهادار تهران. پژوهش‌های تجربی حسابداری. سال سوم. شماره 9. صص 20-1
  • علی خانی، رضیه، مران جوری؛ مهدی (1393). بررسی افشای مسئولیت‌های اجتماعی از بعد موضوع: شواهدی از بورس اوراق بهادار تهران، اولین همایش ملی حسابداری. حسابرسی و مدیریت.
  • مجاهد, مهدی؛ محمد ندیری و مهدی پندار، ۱۳۹۶، تجزیه و تحلیل تاثیر ریسک و رقابت پذیری بر سودآوری بانک­های پذیرفته شده دربورس اوراق بهادار تهران، سومین همایش ملی پژوهش های مدیریت و علوم انسانی در ایران، تهران، موسسه پژوهشی مدیریت مدبر.
  • محمودآبادی، حمید؛ زمانی، زینب (1395). بررسی رابطه بین ریسک‌پذیری شرکت و عملکرد مالی با تأکید بر ساز و کارهای راهبری شرکتی. فصلنامه علمی- پژوهشی مطالعات تجربی حسابداری مالی. سال 12. شماره 49. صص 170-141.
  • نیکبخت، محمدرضا؛ شریفی، مریم (1389). پیش بینی ورشکستگی مالی شرکت های بورس اوراق بهادار تهران با استفاده از شبکه‌های عصبی مصنوعی. مدیریت صنعتی دانشگاه تهران. 2(4). صص 180-163.
  • Altman E.I. (1968). Financial ratios, discriminant analysis and the prediction of corporate bankruptcy, Journal of Finance, Vol. 23, nr. 4, pp. 589-609.
  • Aribi, A. & Gao, S. (2010). Corporate social responsibility disclosure,Journal of Financial Reporting and Accounting, 8 (2), pp. 72-91.
  • Benlemlih, M., & Potin, I, G. (2018). Corporate Social Responsibility and Firm, Financial Risk Reduction: On the Moderating Role of the Legal Environment, www.ssrn.com.
  • Boermans, M & Willebrands D. (2012). Financial constraints, risk taking and firm performance: Recent evidence from microfinance clients in Tanzania, DNB Working Paper. No. 358.
  • Bruner, C. M. (2010). Corporate governance reform in a time of crisis, The Journal of Corporate Law, 36(2), pp. 309-341
  • Campbell, J.Y., Lettau, M., Malkiel, B.G. & Xu, Y. (2001). Have individual stocks become more volatile? An empirical exploration of idiosyncratic risk, Journal of Finance, Vol56, No 1, pp. 1–43.
  • Campbell, J. L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility, Academy ofManagement Review, 32(3), pp. 946–967.
  • Chan, Ch.Y, Chou, D.W, Lo, H.Ch. (2017). Do financial constraints matter when firms engage in CSR? North American Journal of Economicsand Finance, Volume 39, pp. 241-259.
  • Cressy, R. (2006). Why do most firms die young? Small Business Economics, 26(2), pp. 103-116.
  • De Weerdt, J. (2010). Moving out of poverty in Tanzania: Evidence from Kagera, Journal of Development Studies, 46(2), pp. 331-349.
  • Du, S., C. B. Bhattacharya, and S. Sen. (2010). Maximizing Business Returns to Corporate Social Responsibility (CSR): The Role of CSR Communication, International Journal of Management Reviews 12 (1): 8–19. doi:10. 1111/ ijmr. 2010.12.issue-1.
  • Ferrell, A., H. Liang, and L. Renneboog. (2016). Socially Responsible Firms, Journal of Financial Economics 122 (3):585–606. doi:10.1016/j.jfineco. 2015.12.003.
  • Gao, S. S., Heravi, S. & Xiao, J. Z. (2005). Determinants of corporate social and environmental reporting in Hong Kong: A research note. Accounting Forum, 29 (2), pp. 233–242.
  • Garriga, E., & Mele, D. (2004). Corporate social responsibility theories: Mapping and territory, Journal of Business Ethics, 53, pp. 51–74.
  • Godfrey, P. C., Hatch, N. W., & Hansen, J. M. (2008). Toward a general theory of CSRs: The roles of beneficence, profitability, insurance, and industry heterogeneity, Business and Society. http://dx.doi.org/ 10.1177/ 0007650308315494.
  • GOYAL, A. and SANTA-CLARA P. (2003). Idiosyncratic Risk Matters!, the journal of finance lviii, no. 3, pp. 975-1007.
  • Huly, M., DiSegni,  S.A. (2015). Corporate Social Responsibility, Environmental Leadership, and Financial Performance, Social Responsibility Journal, Vol. 11 Iss 1, pp. 3-15.
  • Hutchinson, M, Seamer, M &Chapple, L. (2013). Institutional Investors, Risk/Performance and Corporate Governance: Practical Lessons from the Global Financial Crisis,The International Journal of Accounting Symposium, Zhongnan University of Economics and Law, China.
  • Imhof, M. J. and Seavey, S. E. (2014).Corporate risk-taking, firm value and high levels of managerial earnings forecasts. Advances in Accounting, incorporating Advances in International Accounting 30 (2), pp. 328–337.
  • John, K., Litov, L., & Yeung, B. (2008). Corporate governance and risk taking. Journal of Finance, 63(4), pp.1679-1728
  • Kraus, S. I., Rigtering, J. P. C., Hughes, M., & Hosman, V. (2011). Entrepreneurial orientation and the business performance of SMEs: A quantitative study from the Netherlands. Review of Managerial Science, 6(2), 161-182.
  • Lee, D., and Faff, R. (2009). Corporate Sustainability Performance and Idiosyncratic Risk: A Global Perspective, Financial Review 44 (2), pp. 213–237.
  • Lins, K. V., Servaes, H. and Tamayo, A. (2016). Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis.” The Journal of Finance 72 (4), pp.1785–1824.
  • Liu, M., Lu, W. (2019). Corporate social responsibility, firm performance, and firm risk: the role of firm reputation. Asia-Pacific Journal of Accounting & Economics, pp. 1608-1625.
  • Luo, X. M., and Bhattacharya, C. B. (2006). The Debate over Doing Good: Corporate Social Performance, Strategic Marketing Levers, and Firm-Idiosyncratic Risk, Journal of Marketing 73 (6), pp. 198–213.
  • Lwango, A., Coeurderoy, R., Giménez Roche, G.A. (2017).  Family influence and SME performance under conditions of firm size and age, Journal of Small Business and Enterprise Development, 24 (3).
  • Magill, M., Quinzii, M. and Rochet, J. C. (2015). A Theory of the Stakeholder Corporation, Econometrica 83 (5), pp. 1685–1725.
  • McAlister, L., Srinivasan, R. and Kim, M. (2007). Advertising, Research and Development, and Systematic Risk of the Firm, Journal of Marketing 71 (1), pp. 35–48.
  • Naseem, T., Shahzad, F., Asim, Gh. A., Ur Rehman, I., Nawaz, F. (2019). Corporate social responsibility engagement and firm performance in Asia Pacific: The role of enterprise risk management, Corporate Social Responsibility and Environmental Management. 27(4), pp. 1-13.
  • Nguyen, P. (2011). Corporate governance and risk-taking: Evidence from Japanese firms, Pacific-Basin Finance Journal, 19, pp. 278–297.
  • Nyeadi, D., Ibrahim, M.,  Awudu Sare, Y. (2018). Corporate social responsibility and financial performance nexus: Empirical evidence from South African listed firms, ournal of Global Responsibility. 9 (3), pp. 301-328.
  • Orlitzky, M., F. L. Schmidt, and S. L. Rynes. (2003). Corporate Social and Financial Performance: A Meta-Analysis,Organization Studies 24 (3), pp. 403–441.
  • Rauch, A., Wiklund, J., Lumpkin, G. T., & Frese, M. (2009). Entrepreneurial orientation and business performance: An assessment of past research and suggestions for the future, Entrepreneurship Theory and Practice, 33(3), pp. 761-787.
  • Rose, P. (2010). Regulating risk by strengthening corporate governance, (Ohio State Public Law Working Paper No. 130). Retrieved from SSRN website: http://ssrn. com/ abstract= 1630122
  • Sandhu, H. S. and Kapoor, S. (2010). Corporate social responsibility initiatives: An analysis of voluntary corporate disclosure, South Asian, Journal of Management, 17(2), pp. 47-80.
  • Starks, L. T. (2009). A keynote speech: Corporate governance and corporate social responsibility: What do investors care about? What should investors care about? The Financial Review, 44, 461–468.
  • Tan, Y, (2016). The impacts of risk and competition on bank profitability in China, Journal of International Financial Markets, Institutions & Money, 40 (1), pp. 85–110.
  • Wahba, H., Elsayed, Kh. (2015). The mediating effect of financial performance on the relationship between social responsibility and ownership structure, Future Business Journal, http://dx. doi. org/10. 1016/j.fbj.2015.02.001.
  • Wang, H., Tong, L., Takeuchi, R. and George, G. (2016). Corporate Social Responsibility: An Overview and New Research Directions, Academy of Management Journal, 59(2), pp. 534-544.
  • Xu, Y., Malkiel, B. (2003). Investigating the behavior of idiosyncratic volatility, Journal of Business, 76, pp. 613–644.
  • Zhao, H., Seibert, S.E., & Lumpkin, G. T. (2010). The relationship of personality to entrepreneurial intentions and performance: A meta-analytic review, Journal of Management, 36(2), pp. 381-404
  • Zhu, Y., L. Y. Sun, and Leung, A. S. M. (2014). Corporate Social Responsibility, Firm Reputation, and Firm Performance: The Role of Ethical Leadership, Asia Pacific Journal of Management, 31 (4), 925–947.