The effect of corporate social responsibility on firm performance: Insights from ISO 9001‐certified manufacturing firms in Ghana

Abstract

AbstractThe purpose of this paper is to examine the effect of corporate social responsibility (CSR) on the performance of ISO 9001‐certified manufacturing firms in Ghana. Specifically, we explore the effect of CSR on the market value and profitability of manufacturing firms in Ghana that have adopted ISO 9001. We use panel data estimation techniques to examine the empirical link between CSR activities and the performance of ISO 9001 certified manufacturing firms. Our panel data was pooled from a total of 65 ISO 9001‐certified manufacturing firms in Ghana observed over 5 years yielding a total of 325 firm‐year observations. Our empirical results show that there is a positive relationship between CSR, market share and profitability of ISO 9001‐certified manufacturing firms. The results are indicative that firms stand to gain if they adopt a more deliberate strategy toward CSR activities. This study provides significant input to the extant literature and offers a comprehensive guide to policy makers and management of ISO 9001‐certified manufacturing firms on CSR engagement in emerging economies like Ghana.