A study of the effect of corporate social responsibility on the corporate profitability of selected Philippine companies for the period 2009-2013

• Main Authors: Chua, Bernisse C., Dela Merced, Sarah Camille G., Libunao, Nica Cielo B., Ong, Bernadelle Chrisette J.
• Format: text
• Language: English
• Published: Animo Repository 2014
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/11962
• Institution: De La Salle University

Engaging in corporate social responsibility (CSR) activities is increasingly being considered by companies nowadays due to the general belief that it has a positive impact on an entity's profitability. Some studies have proven this to be true while others come to conclusions that disprove this belief. The disagreement may be an effect of the absence of a generally accepted method to measure CSR or that CSR practices can have different impacts depending on the industry being studied. For a company to be regarded as sustainable in accordance with the triple bottom line (TBL), it must perform well in three specific areas: economic, social, and environmental. This study seeks to determine the effect of CSR (social and environmental performance) on the profitability (economic performance) of Philippine companies for the years 2009-2013. The data used in this research are sourced from CSRHub, for social and environmental performance, and from the selected companies financial statements for the economic performance which were then used in computing for the return on equity (ROE), return on assets (ROA), and net operating profit margin (NOPM) that served as the measures of profitability. Afterwards, multiple linear regression analysis was used to know the effect of social and environmental CSR on the profitability both in the overall and inter-industry analysis. Overall, social and environmental CSR has no significant effect on the profitability. Meanwhile for the inter-industry, social CSR has a positive effect on NOPM while environmental CSR has a positive effect on both ROE and NOPM for some industries. There also exists a negative effect for both social and environment CSR on ROA for other industries. Despite mixed results, it is recommended for these businesses to continue engaging in their CSR activities. Adjustments should be made if companies want to achieve satisfactory CSR scores and while having good economic performance.