When CSR Matters: The Moderating Effect of Industrial Growth Rate on the Relationship between CSR and Firm Performance

Corporate social responsibility (CSR) has become a management strategy that simultaneously pursues societal and company sustainable development. Additionally, CSR is becoming a key strategy to secure competitiveness and sustainability by improving a company’s reputation and creating new business opportunities. Thus, expectations and demands for companies’ social impacts and sustainability from various stakeholders, such as shareholders, consumers, employees, and local communities, have begun to rise. This study focused on the distinctive factor of rapid economic growth, which characterizes Korean development, and analyzed the relationship between CSR and firm performance according to the industries’ growth rates. Regression analysis was conducted through multi-level analysis using data from a sample of 102 companies that prepared sustainability reports or ESG reports in Korea; the research results are as follows. First, CSR activities have a positive impact on firm performance. Second, when CSR activities increase, the firm performance increases faster for companies in the high-growth industry group than those in the low-growth industry group. Furthermore, we conducted additional analyses to examine the moderating effect of industry growth and found that companies in the high-growth industry group had higher overall CSR levels than those in the low-growth industry group. This study’s results provide meaningful implications for understanding how CSR affects a company’s economic performance and acts as a way to strike a balance between industrial development and fulfilling social responsibility.