The Impact of Corporate Social Responsibility on Financial Performance of The Company by Considering the Corporate Governance as Moderating Variable and Competitive Advantage as Mediating Variable

Abstract

This study examines the impact of Corporate Social Responsibility (CSR) on financial performance, with corporate governance as a moderating variable and competitive advantage as a mediating variable. The research employed a quantitative approach using structured questionnaires distributed to 200 managers from various companies.

Data analysis utilized correlation analysis, regression analysis, and PROCESS macro for testing mediation and moderation effects. The findings reveal that CSR has a significant positive impact on financial performance (β=0.2681, p<0.001). Competitive advantage significantly mediates the relationship between CSR and financial performance (β=0.4789, p<0.001), while corporate governance moderates the CSR-competitive advantage relationship, strengthening it when governance is strong (β=0.0122, p<0.05).

The study contributes to the growing body of literature on CSR by empirically validating the mediating and moderating mechanisms through which CSR influences financial performance. The research has practical implications for top management, suggesting that CSR strategies should be integrated with corporate governance practices to achieve sustainable competitive advantage and enhanced financial performance. Limitations include the cross-sectional design, convenience sampling, and small sample size, which restrict generalizability.

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Correction: The fourth author's name appears duplicated in the original citation. Please verify the author list against the published article.

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