Corporate social responsibility and firm performance in a developing nation: Is there any linkage?

Abstract

This study is aimed at linking corporate social responsibility with the performance of firms in a developing nation. As my area of study, I have chosen Bangladesh, a fast growing developing nation where corporate social responsibility has gained a lot of significance in the recent period. Based on institutional theory and stakeholder theory, I argue that firms? corporate social performance will enhance the possibility of better financial performance over time. I proposed the use of a CSR index, customized for a Bangladeshi context, as an indicator of corporate social performance of publicly listed companies in the Dhaka Stock Exchange. Although the results suggest that there is no clear relationship between social performance and firm performance as of now, the findings do indicate that the awareness regarding the need for CSR and implementation of socially responsible activities are on the rise.