Corporate Social Responsibility & Firm Efficiency: Evidence from Endogenous Cost Inefficiency Stochastic Frontier Analysis

T. Van Binh; Abay Mulatu; Boying Xu

doi:10.1080/00036846.2022.2063790

Corporate Social Responsibility & Firm Efficiency: Evidence from Endogenous Cost Inefficiency Stochastic Frontier Analysis

T. Van Binh, Abay Mulatu, Boying Xu

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Abstract

This paper investigates the relationship between firms’ performance in corporate social responsibility (CSR) and cost efficiency. We use a newly developed panel data model of stochastic frontier analysis that endogenizes cost efficiency. The dataset consists of 1,673 firms from ten provinces in Vietnam over three years: 2009, 2011 and 2013. Our results suggest that CSR can enhance cost efficiency of firms. This positive effect of CSR on efficiency can be masked if cost efficiency is treated
as exogenous or endogeneity is not handled appropriately. The upshot is that our results challenge the widely held view of the existence of a trade-off between CSR and firm efficiency.

Original language	English
Pages (from-to)	6380-6392
Number of pages	13
Journal	Applied Economics
Volume	54
Issue number	55
Early online date	1 May 2022
DOIs	https://doi.org/10.1080/00036846.2022.2063790
Publication status	Published - 26 Nov 2022

Bibliographical note

This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Keywords

Stochastic frontier models
CSR
efficiency
Vietnamese enterprises

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1080/00036846.2022.2063790Licence: CC BY

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Cite this

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abstract = "This paper investigates the relationship between firms{\textquoteright} performance in corporate social responsibility (CSR) and cost efficiency. We use a newly developed panel data model of stochastic frontier analysis that endogenizes cost efficiency. The dataset consists of 1,673 firms from ten provinces in Vietnam over three years: 2009, 2011 and 2013. Our results suggest that CSR can enhance cost efficiency of firms. This positive effect of CSR on efficiency can be masked if cost efficiency is treatedas exogenous or endogeneity is not handled appropriately. The upshot is that our results challenge the widely held view of the existence of a trade-off between CSR and firm efficiency.",

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AB - This paper investigates the relationship between firms’ performance in corporate social responsibility (CSR) and cost efficiency. We use a newly developed panel data model of stochastic frontier analysis that endogenizes cost efficiency. The dataset consists of 1,673 firms from ten provinces in Vietnam over three years: 2009, 2011 and 2013. Our results suggest that CSR can enhance cost efficiency of firms. This positive effect of CSR on efficiency can be masked if cost efficiency is treatedas exogenous or endogeneity is not handled appropriately. The upshot is that our results challenge the widely held view of the existence of a trade-off between CSR and firm efficiency.

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Corporate Social Responsibility & Firm Efficiency: Evidence from Endogenous Cost Inefficiency Stochastic Frontier Analysis

Abstract

Bibliographical note

Keywords

UN SDGs

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