Mediating role of Stakeholders Engagement on relation between Corporate Social Responsibility and Financial Performance
DOI:
https://doi.org/10.66635/3sf0vh64Keywords:
Corporate social responsibility (CSR), financial performance, stakeholder engagement, small and medium enterprises (SMEs), firm performanceAbstract
Purpose: Sustainability is multidimensional concept which is gaining interest recently. Various studies have performed to examine the relationship between the two still its relation with financial performance is inconclusive. The study aims to analyze the relationship between corporate social responsibility and financial performance of small and medium enterprises while focusing on stakeholder engagement as a mediator variable.
Design/Approach: Mediation analysis was employed to examine the mediating role of stakeholder engagement. For this study, primary data was collected from 196 Indian SMEs through structured questionnaire.
Findings: The results reveal that CSR has a significant positive impact on both stakeholder engagement and financial performance. Moreover, the stakeholder engagement has a strong impact on financial performance, which proves its utmost importance to organizational success. The finding highlights the importance of transparency and responsible practices in enhancing stakeholder trust, participation and involvement. It aligns with the motion that CSR activities act as a communication mechanism that strengthens firm-stakeholder relationships.
Originality/Value: The study contributes to our knowledge about leading of CSR practices to improve financial performance of SMEs in India. This paper is in a class by itself to authorize the association of CSR and financial performance of Indian SMEs taking stakeholder engagement as mediating factor.
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