Date of Award

Summer 8-24-2024

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Management

First Advisor

Son Le

Abstract

Corporate Social Responsibility (CSR) has garnered significant attention. Understanding the mechanisms through which stakeholders interpret a firm’s CSR efforts and the boundary conditions that affect the relationship between CSR and its outcomes can help companies optimize resource allocation to CSR activities. This research explores the link between CSR and financial performance, highlighting the mediating role of reputation and the moderating effects of different CSR engagement patterns. Drawing on cognitive literature, this study suggests that a firm’s consistently increasing investment in CSR activities can enhance corporate reputation, which in turn improves financial performance. The effect of different CSR engagement patterns on this relationship can be positive or negative, depending on how stakeholders perceive congruent or incongruent CSR information cues. Utilizing data from 269 firms and 1,763 observations between 2013 and 2019, the findings indicate that CSR boosts financial performance via corporate reputation when considering the conditional factors of various engagement patterns; without these factors, CSR efforts do not positively impact corporate reputation. The relationship between CSR and reputation is strengthened by increasing CSR engagement pattern and is slightly enhanced by constant engagement pattern, whereas it is weakened by decreasing or non-constant engagement patterns. Hence, this study applies cognitive literature from the perspective of stakeholder interpretation of CSR information to offer a new understanding of how CSR impacts financial performance and how to maintain such a positive relationship. For practical implications, managers and companies should focus on long-term, continuously improving CSR strategy that enhances competitive advantage and reputation, rather than concentrating solely on the short-term gains or losses of CSR activities.

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