Corporate Social Responsibility Activities and Impact on Firm Value: The Case of the Technology Company Group

Abstract

The objective of this study was to analyze the relationship and influence of the corporate social responsibility (CSR) performance of 50 technology firms with regard to their corporate financial performance (CFP) and ascertain whether there was a substantial positive expansion of the firm’s value, a neutral effect, or no significant impact at all. Samples from global technology companies operating in three industry groups—computers, phones, and household electronics; software and information technology services; and telecommunications services—were collected. The Thomson Reuters ASSET4 database, covering the period of 2009–2017, was utilized for this study. The three CSR–ESG (environmental, social, and corporate governance) pillar scores were considered for comparison as independent X variables. The price-to-earnings ratio (PER) and Tobin’s Q values were used as dependent Y variables. In line with the view that CSR performance is linked to CFP (e.g., the dependence on governance of individual stakeholder’s groups and their proximity to end customers and/or consumers, their potential for social and environmental impacts, and their level of product service differentiation), the industry group classification and the regional and country levels of these 50 technology firms were used as controlling variables. Our recommendations to these companies are to improve their social, governance, and environmental aspects (in this order of priority) and to extend their CSR reach not just at the global–regional level but also within their national country frameworks.