Search results

This study delves into the mediating role of corporate social responsibility (CSR) in the relationship between corporate governance and firm performance while simultaneously considering stakeholder salience as a crucial boundary condition that modulates both the influence of corporate governance on CSR adoption and the impact of CSR on firm performance.

A quantitative approach was adopted, utilising a survey questionnaire to gather data from 315 manufacturing firms. The collected data were analysed using partial least squares and structural equation modelling was used to test the hypotheses.

The study demonstrated a direct positive relationship between corporate governance and firm performance as well as an indirect positive effect mediated by corporate social responsibility. Furthermore, the study uncovered a robust positive correlation between corporate governance and CSR, strengthened by a high level of stakeholder salience.

Firms should consider CSR initiatives not only as ethical endeavours but also as strategic tools for enhancing performance in conjunction with sound governance practices.

The study goes beyond individual impacts of CSR and corporate governance on firm performance to dissect and analyse the dynamics of corporate governance and CSR interaction and how they synergistically stimulate firm performance. The study also acknowledges the complex and dynamic nature of stakeholder relationships by recognising that the effectiveness of corporate governance and CSR may be contingent on the perceived importance of stakeholders, thereby providing fresh insights into the corporate management puzzle.