How corporate social responsibility affects accounting performance : a cross-country analysis

Abstract

Purpose: The aim of this study is to examine the impact of corporate social responsibility (CSR) on the accounting performance (AP). This study extend the previous literature in terms of country coverage which employing Zakat as a proxy for CSR. Design/Methodology/Approach: Our sample for this study is 709 firms from companies in Kuwait, Saudi Arabia, and Malaysia. We predict that highly corporate social responsibility exhibits high level of return on equity (ROE), and return on assets (ROA). Findings: We find that firms with strong incentives for corporate social responsibility are more likely to increase their ROE and ROA. This suggest that corporate social responsibility is important platform in increasing its corporate performance. Practical implications: Based on this study, effectiveness of implementation of CSR program benefits the society, in turn, leads the company to enhance the level of CFP. Originality/Value: This paper uses some companies in some countries in a cross country analysis. Research results in one country often overlooks institutional and cultural factors such as corporate governance, local government regulations, and the relationship between shareholders and management.