Evidence from multiple countries: does investment into internal corporate social responsibility improve firm efficiency?

ABSTRACT

This paper investigates the relationship between internal corporate social responsibility (ICSR) and firm efficiency. Our research employed a two-stage analysis of 33,413 firm-year observations from between 2008 and 2020. First, we measured the level of firm efficiency using data envelopment analysis (DEA). Second, we used panel regression to investigate the impact of investments made by firms into ICSR on their efficiency. Our results showed that such investments into ICSR (e.g. on employee development) increased firm efficiency during the study period.

KEYWORDS:

• Internal corporate social responsibility
• firm efficiency
• data envelopment analysis

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by Universitas Sebelas Maret: [Grant Number Universitas Sebelas Maret Research Grant].