Abstract:
Businesses have responsibilities not only to their owners and shareholders, but also to their employees, customers, suppliers, and the society they belong to. While businesses are trying to continue their activities profitably and efficiently, they also must consider the interests of their stakeholders in their decisions. The concept of corporate social responsibility is not limited to activities such as philanthropy and environmental protection, it envisages the integration of businesses with society and the environment. In this respect, the concepts of corporate social responsibility and corporate governance intersect. In this context, the purpose of this study is to reveal the effect of corporate social responsibility on financial performance of publicly traded companies in Turkey. The research covers 73 non-financial firms included in the BIST 100 Index. The period of the study is between 2015-2019. Panel data analysis method is preferred because the data set includes both time and section dimensions. In the study, firm performance is represented by three different variables, these are return on assets (ROA), Tobin's Q and earning per share (EPS). Six econometric models have been established to determine the impact of corporate social responsibility on firm financial performance. Various control variables have added to the models based on the literature.
The results of the research show that corporate social responsibility does not have a positive effect on firm performance in all 6 models established. The findings reveal that corporate social responsibility does not contribute financially in the short term for Turkish public companies. However, these findings can be interpreted as social responsibility may have an indirect effect on financial performance. Social responsibility is also expected to have both financial and non-financial benefits to companies in the long run at firm level.
