Analyzing the Relationship Between Inventory Policies and CSR Practices: Case of Jordanian Companies

Abstract

The present research aims to assess the impact of inventory policies on the Corporate Social Responsibility practices of companies listed on the Amman Stock Exchange. The companies included in the research belonged to manufacturing or related sectors in which holding inventory is inevitable. The sample size chosen for the research was 45 companies, mainly because of the availability of financial data from the period 2012 to 2022. The data for the research was extracted from the Amman Stock Exchange, and we utilized a regression-based ANOVA model for our analysis, containing the dummy variable to enhance the model’s validation and facilitate the statistical analysis, hence enabling a deeper understanding. We utilized. We also used the GMM model to validate our analysis. The financial variables of the research were based on the reported financial statements of the companies. The study explores the impact of the relationship between inventory policy and Corporate Social Responsibility on the different stakeholders, such as customers, employees, and environmental groups. We found that the CSR disclosure requirements also tend to have an impact on the inventory policies of these companies. Our results revealed that inventory levels are positively associated with satisfied customers. We found that the company’s total CSR and sales ratio do not have a straight-line relationship. It led us to conclude that inventory levels are positively associated with satisfied customers.

Keywords

• inventory
• csr
• inventory to sales ratio
• amman stock exchange
• gmm
• manufacturing sector