Introduction pattern with size. So I will concentrate
estimates the effect corporate social responsibility has on company’s
performances using an index based on company rank in seven areas of CSR. Existing
studies suggest two arguments; improves image and reputation and increases
competitive advantage through development of intangible assets.
studies whether CSR has a significant effect through analysis of six variables,
firstly through scatter graphs to detect any trends, followed by correlation
analysis. Secondly Annova analysis shows the effect of each industry on CSR and
performance. Thirdly regression analysis along with dummy variables allows us
to see the effect of multiple variables simultaneously and the individual
effect of industries. Finally creating an additional variable shows the effect CSR
has on individual industries.
graphs show the relationship between CSR and performance measures MBV, ROCE and
The first graph indicates a strong
positive relationship between MBV and CSR. Implying the more a company engages
in CSR the higher their MBV. It also shows a ranking of industries by MBV.
Industry 1(manufacturing) has higher MBVs compared to industries 2(services)
and 3(primary). Meaning companies in the manufacturing industry may benefit
more from increased CSR compared to those in the other industries.
The second graph shows a similar relationship between ROCE
and CSR, meaning that the higher CSR the higher the ROCE. However this time
there isn’t any obvious pattern between different industries.
graph doesn’t suggest any relationship between Size and CSR, implying there isn’t
an effect on size when engaging in CSR.
seems to have a positive effect on performance hence positive relationship with
ROCE and MBV however doesn’t seem to show a pattern with size. So I will concentrate
on MBV as a measure of performance as it looks to have the strongest
Correlation of CSR on Performance
The table shows Pearson’s
correlations between CSR and the performance variables. The correlation values
shows how strongly correlated each variable is and how an increase in CSR will
affect each variable.
For both MBV
and ROCE there is a strong positive relationship with CSR meaning that an
increase in CSR will result in an increase of MBV/ROCE. Both are also
significant as 0.000