| Abstract [eng] |
The chief aim of this paper is to detect the impact of corporate social responsibility (CSR) on corporate financial performance (CFP). The current paper examines the impact of CSR on direct as well as indirect variables of financial performance. The sample of the study is Georgia, an East-European developing country, which allows generalizing results worldwide. Linear regression has been chosen as the best method for data analysis. The data about the independent variable (CSR orientation) and three dependent variables (corporate reputation, competitive advantage, and long-term orientated effectiveness) has been gathered by organizing four different questionnaire-based surveys. As for the four dependent variables (return on assets, return on equity, current ratio, and net profit), the data has been taken from published financial statements of the participant companies. The findings of the paper indicate that CSR has a significant impact on indirect variables of financial performance, such as reputation, competitive advantage, and long-term orientated effectiveness, in the Georgian business sector. In addition, the results show that corporate social responsibility significantly affects direct variables of CFP, such as return on assets and net profit. Besides, despite demonstrating a significant positive relationship between CSR and the mentioned variables of CFP, the findings show no statistically significant impact of CSR on direct variables of CFP, such as current ratio and return on equity, in the Georgian private sector. |
