Exploring the effect of corporate social responsibility on firm performance: Antecedent, mediator and moderators

Corporate Social Responsibility (CSR) is an important product or service strategy designed to sustain a competitive advantage. CSR has attained a wider recognition and a more enthusiastic acceptance in corporate practice, as well as in the academic literature. It is evident that CSR is a wide, ever-expanding area of research and practice.;Scholars in the area of business and society have investigated the relationship between CSR, and a firm's financial performance for more than three decades. Notwithstanding the increasing number of academic studies on this subject, it is surprising to note a substantial inconsistency in the results in terms of the relationship between CSR and a firm's financial performance. The inconclusiveness of this literature may be attributed to such problems as sampling error, concerns about the reliability and validity of CSR, financial performance measures, omission of controls, and opportunities to test mediating and moderating variables in the studies of this relationship. In particular, there is still a limited understanding of whether CSR affects financial outcomes of the firm, and if so, when and how does CSR affect a particular firm.;This dissertation examines the antecedents, moderators, and mediators of the relationship between CSR and its effects on firms, so as to better understand this relationship. The current study predicts that reputation and brand equity serve as mediators, and international diversification as a moderator, of the relationship between CSR and a firm's performance, while the degree of market competition works as an antecedent of CSR. Hypotheses concerning antecedent, and moderating and mediating effects, are developed and tested using hierarchical multiple regressions with secondary archival data by controlling firm size, age, industry ROA, and a firm's past year ROA. Overall, findings of this dissertation are that the influence of CSR on a firm's performance is significant through the mediating factor of reputation, but not brand equity. Further, international diversification positively moderates the relationship between CSR and a firm's performance, and more competitive markets drive a firm's CSR activities as expected.