Corporate Social Responsibility Moderates the Relationship of Corporate Governance and Investment Decisions; New insight from Emerging Markets

Abstract

Purpose: This paper examines the relationship between Corporate Governance, Corporate Investment, and Financial Performance of firms with moderating relationship of Corporate Social Responsibility in emerging markets of Asia (Pakistan, China, Malaysia, and India). Design/Methodology/Approach: To examine the impact, the panel data of 214 non-financial listed firms from 2014–to 2019 was collected. Findings: We documented a new insight that CSR and CG are significantly associated with CI and FP. Results also show that the quality of CG and CSR enriches the CI decisions that improved FP. Findings also show that CSR moderates the relationship between CG and CI decisions, and between CG and firms’ FP. The board directors and ownership concentration have a positive relationship with CI decisions and FP. Overall CSR moderates the relationship between CI and CP. Implications/Originality/Value: These findings are beneficial to the management of corporations working in emerging markets to improve CSR activities. This research also contributes to existing literature, on how CSR moderates the relationship between CG and CI decisions in the given contexts.

Keywords

• Corporate Social Responsibility Corporate Governance
• Corporate investment
• Firm performance
• Panel Data
• Emerging Markets