Empirical study on relationship between corporate social responsibility and financial performance in Korea

Han, Jae-Joon; Kim, Hyun Jeong; Yu, Jeongmin

doi:10.1186/s41180-016-0002-3

Asian Journal of Sustainability and Social Responsibility

Table 5 ESG-FP relationship in quadratic models

From: Empirical study on relationship between corporate social responsibility and financial performance in Korea

Specification	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Specification	Pooled OLS	Random	Fixed	Max-likelihood	Random	Fixed	Max-likelihood	Max-likelihood
Independent variable	ROE	ROE	ROE	ROE	Stock Return	Stock Return	Stock Return	Stock Return
EDS	-0.280^* (0.148)	-0.413^** (0.169)	-0.610^*** (0.228)	-0.428^** (0.175)	-0.00527 (0.00828)	-0.0165 (0.0123)	-0.0123^* (0.00728)	0.0568^* (0.0327)
EDS _sq	0.00224 (0.00163)	0.00338 (0.00222)	0.00675^** (0.00315)	0.00348 (0.00231)	0.000157 (0.000108)	0.000297^* (0.000170)	0.000196^** (0.0000954)	0.000356 (0.000254)
SDS	0.297 (0.304)	0.218 (0.264)	0.116 (0.310)	0.196 (0.269)	0.0109 (0.0127)	-0.00215 (0.0168)	0.00694 (0.0119)	0.0100 (0.0307)
SDS_sq	-0.00294 (0.00301)	-0.00231 (0.00290)	-0.00280 (0.00367)	-0.00213 (0.00297)	-0.0000781 (0.000139)	0.000169 (0.000199)	-0.0000740 (0.000129)	-0.000377 (0.000297)
GDS	3.702^*** (1.358)	4.134^*** (1.394)	-1.182 (1.632)	3.920^*** (1.450)	0.105 (0.0665)	0.121 (0.0884)	0.130^** (0.0619)	0.0105 (0.0897)
GDS_sq	-0.0327^*** (0.0124)	-0.0351^*** (0.0131)	0.0149 (0.0152)	-0.0329^** (0.0136)	-0.00107^* (0.000623)	-0.00130 (0.000820)	-0.00116^** (0.000583)	0.000612 (0.00114)
Leverage	-25.09^*** (7.277)	-25.11^*** (3.892)	-112.2^*** (11.65)	-28.39^*** (5.159)	0.152 (0.180)	1.397^** (0.622)	0.0821 (0.146)	0.0915 (0.142)
Asset Size	1.186 (0.800)	1.079 (0.657)	5.447^* (3.287)	1.349^* (0.758)	-0.0895^*** (0.0315)	-0.982^*** (0.178)	-0.0782^*** (0.0264)	-0.0736^*** (0.0264)
L.ROE	0.371^*** (0.102)	0.364^*** (0.0429)	0.0210 (0.0491)	0.297^*** (0.0643)
D	5.878^*** (1.447)				0.461^*** (0.0719)
L. Stock Return					-0.0434 (0.0400)	-0.166^*** (0.0431)	0.0777 (0.0578)	0.101^* (0.0604)
EDS_SDS								0.000750^* (0.000405)
EDS_GDS								-0.00212^** (0.000917)
SDS_GDS								-0.0000175 (0.000850)
Constant	-122.9^*** (46.88)	-129.2^*** (37.17)	-70.63 (103.2)	-129.0^*** (38.33)	-0.237 (1.770)	24.90^*** (5.586)	-1.117 (1.602)	0.708 (1.859)
N	564	564	564	658	564	564	658	658
R ²	0.269	0.249	0.201		0.096	0.117

The variables are EDS environmental disclosure score, SDS social disclosure score, GDS governance disclosure score, ROE return on equity, MBR market-to-book ratio implying Tobin q, Stock Return annual stock market return, Leverage leverage ratio as proxy for risk, Log (Asset size) log value of asset size, D dummy variable for financial crisis, L.xxx lagged variable, xxx_xxx cross-term
P-values in parentheses: * p b 0.1, ** p b 0.05, *** p b 0.01
Data source: Bloomberg

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