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We examine the longitudinal relationship between corporate social responsibility (CSR) performance and financial performance by investigating attributes among firms operating in different industry sectors longitudinally. Using panel regression analysis on Australian publicly listed firms from 2007 to 2021, we find that CSR performance positively influences financial performance. Furthermore, our industry-specific analysis uncovers notable distinctions. Specifically, within the consumer product markets, including recreational facilities, travel and tourism, lodging, dining, and leisure products, firms benefit from stakeholder rewards for their CSR efforts, leading to sustained financial gains. However, this positive association is absent for firms operating in industrial product markets, where stakeholders do not offer similar rewards for CSR performance. The significance of stakeholder engagement becomes evident in consumer market sectors, as firms with higher levels of CSR performance secure stakeholder support, resulting in superior long-term financial performance. Our findings contribute to the existing CSR literature and offer practical insights and implications for managers operating in diverse product market industries, including the dynamic field of tourism and hospitality seeking to harness CSR performance, meet stakeholder expectations, and achieve financial advantages.
Arian et al. (Thu,) studied this question.